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Published: 2008-03-26

Combination Agreement - Duke Energy Corp. and Westcoast Energy Inc.



                              COMBINATION AGREEMENT

                                      AMONG

                            DUKE ENERGY CORPORATION,

                          3058368 NOVA SCOTIA COMPANY,

                               3946509 CANADA INC.

                                       AND

                              WESTCOAST ENERGY INC.









                               SEPTEMBER 20, 2001



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                                TABLE OF CONTENTS


ARTICLE 1 INTERPRETATION
1.1      Definitions..................................................1
1.2      Interpretation Not Affected by Headings, etc.................9
1.3      Rules of Construction........................................9
1.4      Date For Any Action..........................................9
1.5      Schedules....................................................9
ARTICLE 2 THE ARRANGEMENT
2.1      Implementation Steps by Westcoast...........................10
2.2      Implementation Steps by Duke Energy Parties.................10
2.3      Interim Order...............................................11
2.4      Articles of Arrangement.....................................11
2.5      Westcoast Circular..........................................11
2.6      Securities Compliance.......................................12
2.7      Preparation of Filings......................................13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES of Westcoast
3.1      Organization and Standing...................................14
3.2      Capitalization..............................................15
3.3      Authority and No Conflicts..................................17
3.4      Consents; Approvals.........................................18
3.5      No Defaults.................................................18
3.6      Absence of Certain Changes or Events........................19
3.7      Employment Matters..........................................19
3.8      Reports; Financial Statements...............................21
3.9      Contracts...................................................22
3.10     Litigation..................................................23
3.11     Environmental...............................................23
3.12     Tax Matters.................................................24
3.13     Pension and Employee Benefits...............................25
3.14     Affiliates..................................................28
3.15     Compliance with Laws; Permits...............................29
3.16     Restrictions on Business Activities.........................29
3.17     Intellectual Property.......................................30
3.18     Insurance...................................................31
3.19     Property....................................................31
3.20     Regulatory Proceedings......................................32
3.21     Regulation as a Utility.....................................32
3.22     Futures Trading and Fixed Price Exposure....................32
3.23     Opinion of Financial Advisor................................33
3.24     Brokerage and Finders' Fees.................................33
3.25     Westcoast Rights Plan.......................................33
3.26     Solvency of Westcoast.......................................33




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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE DUKE ENERGY PARTIES
   4.1      Organization and Standing.............................................33
   4.2      Capitalization........................................................34
   4.3      Authority and No Conflicts............................................35
   4.4      Consents; Approvals...................................................36
   4.5      No Defaults...........................................................36
   4.6      Absence of Certain Changes or Events..................................37
   4.7      Reports; Financial Statements.........................................37
   4.8      Litigation............................................................37
   4.9      Environmental.........................................................38
   4.10     Nuclear Operations....................................................39
   4.11     Compliance with Laws; Permits.........................................39
   4.12     Regulatory Proceedings................................................40
   4.13     Futures Trading and Fixed Price Exposure..............................40
   4.14     Brokerage and Finders' Fees...........................................40
ARTICLE 5 COVENANTS AND AGREEMENTS
   5.1      Covenants of Westcoast................................................40
   5.2      Covenants of Duke Energy..............................................47
   5.3      Access to Information.................................................49
   5.4      Indemnification.......................................................50
   5.5      Covenants Regarding Non-Solicitation..................................50
   5.6      Right to Accept a Superior Proposal...................................52
   5.7      Employee Benefits and Related Matters.................................53
   5.8      Prohibition on Voluntary Liquidation..................................54
   5.9      Conversion of Westcoast Preferred Shares..............................54
   5.10     Closing Matters.......................................................55
ARTICLE 6 CONDITIONS
   6.1      Mutual Conditions.....................................................55
   6.2      Additional Conditions to the Obligations of the Duke Energy Parties...56
   6.3      Additional Conditions to the Obligations of Westcoast.................58
   6.4      Satisfaction of Conditions............................................59
ARTICLE 7 AMENDMENT AND TERMINATION
   7.1      Amendment.............................................................59
   7.2      Termination...........................................................59
   7.3      Effect of Termination.................................................61
   7.4      Effect of Termination Fee Payment.....................................63
ARTICLE 8 GENERAL
   8.1      Investigation.........................................................64
   8.2      Notices...............................................................64
   8.3      Assignment............................................................65
   8.4      Binding Effect........................................................65
   8.5      Third-Party Beneficiaries.............................................65
   8.6      Waiver and Modification...............................................65
   8.7      No Personal Liability.................................................65
   8.8      Further Assurances....................................................66



                             COMBINATION AGREEMENT
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   8.9      Expenses..............................................................66
   8.10     Public Announcements..................................................66
   8.11     Governing Laws; Consent to Jurisdiction...............................66
   8.12     Remedies..............................................................66
   8.13     Time of Essence.......................................................67
   8.14     Entire Agreement......................................................67
   8.15     Severability..........................................................67
   8.16     Counterparts..........................................................67


Schedules:
     A - Form of Affiliate's Letter
     B - Appropriate Regulatory Approvals
     C - Form of Arrangement Resolution
     D - Form of Westcoast Rights Plan Waiver Resolution
     E - Form of Plan of Arrangement
     F - Form of Support Agreement
     G - Form of Voting and Exchange Trust Agreement




                             COMBINATION AGREEMENT
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                              COMBINATION AGREEMENT

         THIS COMBINATION AGREEMENT dated September 20, 2001 (this "Agreement"),
is entered into by and among Duke Energy Corporation, a North Carolina
corporation ("Duke Energy"), 3058368 Nova Scotia Company, an unlimited liability
company existing under the Laws of the Province of Nova Scotia and an indirect
wholly-owned subsidiary of Duke Energy Corporation ("Callco"), 3946509 Canada
Inc., a corporation existing under the Laws of Canada and a wholly-owned
subsidiary of Callco ("Exchangeco"), and Westcoast Energy Inc., a corporation
existing under the Laws of Canada ("Westcoast"). Duke Energy, Callco and
Exchangeco are collectively referred to herein as the "Duke Energy Parties."

                                    RECITALS

         The Board of Directors of Westcoast has determined that the business
combination to be effected by means of the Plan of Arrangement is advisable and
in the best interest of Westcoast and has approved the transactions contemplated
by this Agreement and determined to recommend approval of the Plan of
Arrangement and other transactions contemplated hereby to the Westcoast
Securityholders.

         The Board of Directors of Duke Energy has determined that the business
combination to be effected by means of the Plan of Arrangement is advisable and
in the best interest of Duke Energy and has approved the transactions
contemplated by this Agreement.

         In furtherance of such business combination, the Board of Directors of
Westcoast has agreed to submit the Plan of Arrangement and other transactions
contemplated hereby to the Westcoast Securityholders and the Supreme Court of
British Columbia for approval.

         NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:

                                   ARTICLE 1

                                 INTERPRETATION

1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires, the following
terms shall have the following meanings respectively:

         "1933 ACT" means the United States Securities Act of 1933, as amended;

         "1935 ACT" means the United States Public Utility Holding Company Act 
         of 1935, as amended;

         "ACQUISITION PROPOSAL" means any of the following (other than the
         transactions contemplated by this Agreement or the Arrangement): (a)
         any merger, amalgamation, arrangement, share exchange, take-over bid,
         tender offer, recapitalization, consolidation 


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         or business combination directly or indirectly involving Westcoast or
         any of its Material Subsidiaries (for this purpose, each reference to
         5% in the definition of Material Subsidiary shall be deemed to be 10%),
         (b) any acquisition of assets representing 20% or more of the book
         value (on a consolidated basis) of the assets of Westcoast and its
         subsidiaries, taken as a whole (or any lease, long-term supply
         agreement, exchange, mortgage, pledge or other arrangement having a
         similar economic effect) in a single transaction or a series of related
         transactions, (c) any acquisition of beneficial ownership (as defined
         under Section 13(d) of the Exchange Act) of 20% or more of the
         Westcoast Common Shares in a single transaction or a series of related
         transactions, (d) any acquisition by Westcoast of any assets or capital
         stock of another person (other than acquisitions of capital stock or
         assets of any other person that are not, individually or in the
         aggregate, material to Westcoast and its subsidiaries, taken as a
         whole), or (e) any bona fide proposal to, or public announcement of an
         intention to, do any of the foregoing;

         "AFFECTED EMPLOYEES" has the meaning ascribed thereto in Section 5.7;

         "AFFILIATE" has the meaning ascribed thereto in the Securities Act,
         unless otherwise expressly stated herein;

         "AFFILIATE'S LETTER" means a letter, to be substantially in the form
         and content of Schedule A annexed hereto;

         "AGREEMENT" has the meaning ascribed thereto in the Preamble;

         "APPROPRIATE REGULATORY APPROVALS" means those sanctions, rulings,
         consents, orders, exemptions, permits and other approvals (including
         the lapse, without objection, of a prescribed time under a statute or
         regulation that states that a transaction may be implemented if a
         prescribed time lapses following the giving of notice without an
         objection being made) of Governmental Entities, or self-regulatory
         organizations, as set out in Schedule B annexed hereto;

         "ARRANGEMENT" means an arrangement under Section 192 of the CBCA on the
         terms and subject to the conditions set out in the Plan of Arrangement,
         subject to any amendments or variations thereto made in accordance with
         Section 7.1 hereof or Article 6 of the Plan of Arrangement, or made at
         the direction of the Court in the Final Order;

         "ARRANGEMENT RESOLUTION" means the special resolution of the Westcoast
         Securityholders, to be substantially in the form and content of
         Schedule C annexed hereto;

         "ARTICLES OF ARRANGEMENT" means the articles of arrangement of
         Westcoast in respect of the Arrangement that are required by the CBCA
         to be sent to the Director after the Final Order is made;

         "BUSINESS DAY" means any day on which commercial banks are generally
         open for business in New York, New York and Vancouver, British Columbia
         other than a Saturday, a Sunday or a day observed as a holiday in New
         York, New York under the Laws of the State of New York or the federal
         Laws of the United States of America or in 



                             COMBINATION AGREEMENT
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         Vancouver, British Columbia under the Laws of the Province of British
         Columbia or the federal Laws of Canada;

         "CALLCO" has the meaning ascribed thereto in the Preamble;

          "CBCA" means the Canada Business Corporations Act as now in effect and
         as it may be amended from time to time prior to the Effective Date;

         "CIRCULAR" means the notice of the Westcoast Meeting and accompanying
         management proxy circular, including all schedules and exhibits
         thereto, to be sent to the Westcoast Securityholders in connection with
         the Westcoast Meeting;

         "CODE" has the meaning ascribed thereto in Section 3.12(b);

         "CONFIDENTIALITY AGREEMENT" means the confidentiality letter agreement
         dated April 6, 2001 between Duke Energy and Westcoast;

         "COURT" means the Supreme Court of British Columbia;

         "CRMC" has the meaning ascribed thereto in Section 3.22;

         "DIRECTOR" means the Director appointed pursuant to Section 260 of the
         CBCA;

         "DISSENT RIGHTS" means the rights of dissent in respect of the
         Arrangement described in Section 3.1 of the Plan of Arrangement;

         "DUKE ENERGY" has the meaning ascribed thereto in the Preamble;

         "DUKE ENERGY COMMON SHARES" means the shares of common stock in the
         capital of Duke Energy;

         "DUKE ENERGY DISCLOSURE LETTER" means that certain letter of disclosure
         dated as of the date hereof and signed by an authorized officer of Duke
         Energy and delivered by Duke Energy to Westcoast on or prior to the
         date hereof;

         "DUKE ENERGY DOCUMENTS" has the meaning ascribed thereto in Section
         4.7(a);

         "DUKE ENERGY ENVIRONMENTAL PERMITS" has the meaning ascribed thereto in
         Section 4.9(b);

         "DUKE ENERGY PARTIES" has the meaning ascribed thereto in the Preamble;

         "DUKE ENERGY PERMITS" has the meaning ascribed thereto in Section
         4.11(b);

         "DUKE ENERGY SEC DOCUMENTS" has the meaning ascribed thereto in Section
         4.7(a); and

         "DUKE ENERGY STOCK PLANS" means Duke Energy's existing benefit or stock
         purchase plans which provide for the issuance, grant or sale of Duke
         Energy Common Shares or options to purchase Duke Energy Common Shares.


                             COMBINATION AGREEMENT
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         "EASEMENTS" has the meaning ascribed thereto in Section 3.19(b);

         "EFFECTIVE DATE" means the date shown on the certificate of arrangement
         to be issued by the Director under the CBCA giving effect to the
         Arrangement provided that such date occurs on or prior to the date that
         is 365 days following the date hereof, or such later date as may be
         mutually agreed upon by the parties hereto;

         "EFFECTIVE TIME" has the meaning ascribed thereto in the Plan of
         Arrangement;

         "ENGAGE" has the meaning ascribed thereto in Section 3.22;

         "ENVIRONMENTAL LAWS" means all applicable Laws, including applicable
         common Law, relating to the protection of the environment (including,
         without limitation, air, surface water, groundwater and soil) and
         public health and safety;

         "ERISA" has the meaning ascribed thereto in Section 3.13(a);

         "EXCHANGE ACT" means the United States Securities Exchange Act of 1934,
         as amended;

         "EXCHANGE RATIO" has the meaning ascribed thereto in the Plan of
         Arrangement;

         "EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
         capital of Exchangeco, having substantially the rights, privileges,
         restrictions and conditions set out in Appendix 1 to the Plan of
         Arrangement;

         "EXCHANGECO" has the meaning ascribed thereto in the Preamble;

         "EXCLUDED ASSETS" means the assets identified as such in the Westcoast
         Disclosure Letter, being assets that Westcoast is in the process of
         disposing;

         "EXPENSE FEE" means a payment in the amount of $30 million;

         "FINAL ORDER" means the final order of the Court approving the
         Arrangement, as such order may be amended by the Court at any time
         prior to the Effective Date, or, if appealed, then, unless such appeal
         is withdrawn or denied, as affirmed;

         "FIRST PREFERRED SHARES" means the first preferred shares in the
         capital of Westcoast, including each series thereof designated and
         outstanding;

         "FORCE MAJEURE" means (i) an act of God, act of war, civil disturbance
         or other cause beyond such party's reasonable control and power to
         remedy or (ii) a strike or other labor dispute, scarcity of supplies or
         utilities or unavailability or disruption of transportation, which
         such party is not capable of resolving by an investment or the payment
         of a commercially reasonable amount of money;

         "FORM S-3" has the meaning ascribed thereto in Section 2.6(b);

         "FORM S-8" has the meaning ascribed thereto in Section 2.6(c);

         "GOVERNING DOCUMENTS" means, with respect to any person, the
         certificate or articles of incorporation, by-laws, articles of
         organization, limited liability company agreement, 



                             COMBINATION AGREEMENT
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         partnership agreement, formation agreement, joint venture agreement,
         unanimous shareholder agreement or declaration or other similar
         governing documents of such person;

         "GOVERNMENTAL ENTITY" means any (a) multinational, federal, provincial,
         territorial, state, regional, municipal, local or other government,
         governmental or public department, central bank, court, tribunal,
         arbitral body, commission, board, bureau or agency, domestic or
         foreign, (b) subdivision, agent, commission, board, or authority of any
         of the foregoing, or (c) quasi-governmental or private body exercising
         any regulatory, expropriation or taxing authority under, or for the
         account of, any of the foregoing;

         "HAZARDOUS SUBSTANCE" means any pollutant, contaminant, waste of any
         nature, petroleum, hazardous substance, hazardous material, toxic
         substance, dangerous substance or dangerous good, as defined or
         identified in or regulated by any Environmental Law;

         "HOLDERS" means, when used with reference to the Westcoast Common
         Shares, the holders of Westcoast Common Shares shown from time to time
         in the register maintained by or on behalf of Westcoast in respect of
         the Westcoast Common Shares and, when used with reference to the
         Exchangeable Shares, the holders of Exchangeable Shares shown from time
         to time in the register maintained by or on behalf of Exchangeco in
         respect of the Exchangeable Shares;

         "INTELLECTUAL PROPERTY RIGHTS" has the meaning ascribed thereto in
         Section 3.17(a);

         "INTERIM ORDER" means the interim order of the Court, as the same may
         be amended, in respect of the Arrangement, as contemplated by Section
         2.3;

         "KNOWLEDGE" means, with respect to either Duke Energy or Westcoast, the
         knowledge of any officer of such party after reasonable inquiry;
         provided that reasonable inquiry shall not require the inquiry of any
         third party or any Partially Owned Entity;

         "LAWS" means all statutes, regulations, statutory rules, orders,
         judgments, decrees and terms and conditions of any grant of approval,
         permission, authority, permit or license of any court, Governmental
         Entity, statutory body (including The Toronto Stock Exchange and The
         New York Stock Exchange) or self-regulatory authority;

         "MATERIAL ADVERSE EFFECT," when used in connection with Duke Energy or
         Westcoast, means any change, effect, event or occurrence with respect
         to its condition (financial or otherwise), properties, assets,
         liabilities, obligations (whether absolute, accrued, conditional or
         otherwise), businesses, operations or results of operations or those of
         its subsidiaries, or in the case of Westcoast, its Partially Owned
         Entities, that is, or would be reasonably expected to be, material and
         adverse to the current or future business, operations, regulatory
         status, financial condition or results of operations of Duke Energy or
         Westcoast, as the case may be, and its subsidiaries taken as a whole;
         provided, however, that a Material Adverse Effect shall not include
         with respect to any party, any change, effect, event or occurrence with
         respect to its condition (financial or otherwise), properties, assets,
         liabilities, obligations (whether absolute, accrued, conditional or 


                             COMBINATION AGREEMENT
                                       5
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         otherwise), businesses, operations or results of operations of such
         party or any of its subsidiaries directly or indirectly arising out of
         or attributable to any decrease in the market price of Duke Energy
         Common Shares in the case of Duke Energy or Westcoast Common Shares in
         the case of Westcoast (but in either case not any change or effect
         underlying such decrease to the extent such change or effect would
         otherwise constitute a Material Adverse Effect on such party);

         "MATERIAL SUBSIDIARY" means a subsidiary (i) the assets of which exceed
         5% of the total assets of the ultimate parent corporation on a
         consolidated basis as at the end of the last completed fiscal year of
         the ultimate parent corporation or (ii) of which the ultimate parent
         corporation's direct or indirect equity interest in the income (before
         income taxes and extraordinary items) exceeds 5% of such income of the
         ultimate parent corporation on a consolidated basis during the last
         completed fiscal year of the ultimate parent corporation;

         "NET ENGAGE POSITION" has the meaning ascribed thereto in Section 3.22;

         "NUCLEAR STATIONS" has the meaning ascribed thereto in Section 4.10;

         "OPEN DUKE ENERGY POSITION" has the meaning ascribed thereto in Section
         4.13;

         "OSC" means the Ontario Securities Commission;

         "PARTIALLY OWNED ENTITY" means, with respect to a specified person, any
         corporation, partnership, joint venture, limited liability company,
         unlimited liability company, or other organization, incorporated or
         unincorporated, which is not a subsidiary of such specified person but
         in which such specified person, directly or indirectly, owns or
         controls 15% or more of the outstanding securities or other interests
         ordinarily entitled to vote in the election of the board of directors
         or other governing body thereof (or if there are no such voting
         securities or interests, 15% or more of the equity interest in such
         entity); provided that Maritimes & Northeast Pipeline and P.T.
         Puncakjaya Power are not Partially Owned Entities;

         "PERSON" includes any individual, firm, partnership, joint venture,
         venture capital fund, limited liability company, unlimited liability
         company, association, trust, trustee, executor, administrator, legal
         personal representative, estate, group, body corporate, corporation,
         unincorporated association or organization, Governmental Entity,
         syndicate or other entity, whether or not having legal status;

         "PLAN OF ARRANGEMENT" means the plan of arrangement substantially in
         the form and content of Schedule E annexed hereto and any amendments or
         variations thereto made in accordance with Section 7.1 hereof or
         Article 6 of the Plan of Arrangement or made at the direction of the
         Court in the Final Order;

         "PRE-EFFECTIVE DATE PERIOD" shall mean the period from and including
         the date hereof to and including the Effective Time on the Effective
         Date;

         "RATE CHANGE" has the meaning ascribed thereto in Section 5.1(a)(ix);


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         "REPLACEMENT OPTIONS" has the meaning ascribed thereto in the Plan of
         Arrangement;

         "REPRESENTATIVES" has the meaning ascribed thereto in Section 5.3(a);

         "SEC" means the United States Securities and Exchange Commission;

         "SECOND PREFERRED SHARES" means the second preferred shares in the
         capital of Westcoast;

         "SECURITIES ACT" means the Securities Act (Ontario) and the rules,
         regulations and policies made thereunder, as now in effect and as they
         may be amended from time to time prior to the Effective Date;

         "SUBSIDIARY" means with respect to a specified person, (a) any
         corporation, partnership, joint venture, limited liability company,
         unlimited liability company or other organization, incorporated or
         unincorporated, which is a subsidiary as defined in the Securities Act
         of such specified person or (b) a partnership of which such specified
         person or another of its subsidiaries is a general partner or owns
         beneficially more than 50% of the ownership interests;

         "SUPERIOR PROPOSAL" means any bona fide written proposal by a third
         party, directly or indirectly, to acquire assets representing more than
         50% of the book value (on a consolidated basis) of Westcoast's total
         assets or more than 50% of the Westcoast Common Shares, whether by way
         of merger, amalgamation, arrangement, share exchange, take-over bid,
         recapitalization, sale of assets or otherwise, and that in the good
         faith determination of the Board of Directors of Westcoast (based upon
         advice from its financial advisors and outside legal counsel) (a) is
         reasonably capable of being completed without undue delay, taking into
         account all legal, financial, regulatory and other aspects of such
         proposal and the party making such proposal, and (b) would, if
         consummated in accordance with its terms, result in a transaction more
         favourable to Westcoast's Securityholders from a financial point of
         view than the transaction contemplated by this Agreement (including any
         adjustment to the terms and conditions proposed by Duke Energy as
         contemplated by Section 5.6(b));

         "SUPPORT AGREEMENT" means an agreement to be made between Westcoast,
         Duke Energy, Callco and Exchangeco substantially in the form and
         content of Schedule F annexed hereto, with such changes thereto as the
         parties hereto, acting reasonably, may agree;

         "TAX" and "TAXES" have the respective meanings ascribed thereto in
         Section 3.12(c);

         "TAX RETURNS" means all returns, declarations, reports, information
         returns and statements filed or required to be filed with any taxing
         authority relating to Taxes;

         "TERMINATION FEE" means a fee equal to $120 million;

         "TRUSTEE" means the trustee to be chosen by Duke Energy and Westcoast,
         acting reasonably, to act as trustee under the Voting and Exchange
         Trust Agreement, being a 



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         corporation organized and existing under the Laws of the State of New
         York or Delaware and authorized to carry on the business of a trust
         company, and any successor trustee appointed under the Voting and
         Exchange Trust Agreement;

         "UEI CONVERSION NOTICE" has the meaning ascribed thereto in Section
         5.9(b);

         "VOTING AND EXCHANGE TRUST AGREEMENT" means an agreement to be made
         between Duke Energy, Exchangeco and the Trustee in connection with the
         Plan of Arrangement substantially in the form and content of Schedule G
         annexed hereto, with such changes thereto as the parties hereto, acting
         reasonably, may agree;

         "WESTCOAST" has the meaning ascribed thereto in the Preamble;

         "WESTCOAST COMMON SHARES" means the issued and outstanding common
         shares in the capital of Westcoast, including the associated rights
         under the Westcoast Rights Plan;

         "WESTCOAST DISCLOSURE LETTER" means that certain letter of disclosure
         dated as of the date hereof and signed by an authorized officer of
         Westcoast and delivered by Westcoast to Duke Energy on or prior to the
         date hereof;

         "WESTCOAST DIVIDEND REINVESTMENT PLAN" means the plan of Westcoast
         existing on the date hereof pursuant to which holders of Westcoast
         Common Shares may elect to receive dividends in equivalent value of
         Westcoast Common Shares in lieu of cash and may make purchases of
         Westcoast Common Shares;

         "WESTCOAST DOCUMENTS" has the meaning ascribed thereto in Section
         3.8(a);

         "WESTCOAST EMPLOYEE SHARE PURCHASE PLANS" means the share purchase
         plans for Westcoast employees in Canada (whether registered or
         unregistered) and the share purchase plans, if any, for Westcoast
         employees in the United States, in each case, as amended;

         "WESTCOAST ENVIRONMENTAL PERMITS" has the meaning ascribed thereto in
         Section 3.11(b);

         "WESTCOAST MEETING" means the special meeting of Westcoast
         Securityholders, including any adjournment, adjournments, postponement
         or postponements thereof, to be called and held in accordance with the
         Interim Order to consider the Arrangement and the Westcoast Rights Plan
         Waiver Resolution;

         "WESTCOAST OPTIONS" means the Westcoast Common Share purchase options
         granted under the Westcoast Stock Option Plans;

         "WESTCOAST PERMITS" has the meaning ascribed thereto in Section
         3.15(b);

         "WESTCOAST PIPELINE ASSETS" has the meaning ascribed thereto in Section
         3.19(a);

         "WESTCOAST PLANS" has the meaning ascribed thereto in Section 3.13(a);


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         "WESTCOAST RIGHTS PLAN" means the shareholder rights plan of Westcoast
         established pursuant to the Shareholders Rights Plan Agreement dated as
         of April 26, 2000 between Westcoast and Computershare Trust Company of
         Canada (previously called Montreal Trust Company of Canada);

         "WESTCOAST RIGHTS PLAN WAIVER RESOLUTION" means the ordinary resolution
         of the holders of Westcoast Common Shares to be substantially in the
         form and content of Schedule D annexed hereto;

         "WESTCOAST SEC REPORTS" has the meaning ascribed thereto in Section
         3.8(a);

         "WESTCOAST SECURITYHOLDERS" means the holders of Westcoast Common
         Shares and the holders of Westcoast Options, collectively;

         "WESTCOAST SRA REPORTS" has the meaning ascribed thereto in Section
         3.8(a);

         "WESTCOAST STOCK OPTION PLANS" means Westcoast's Long-Term Incentive
         Share Option Plan 1989, as amended effective April 26, 2000 and
         Westcoast's 1999 Key Employee Plan;

1.2      INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.

         The division of this Agreement into articles, sections and other
portions and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof. Unless otherwise
indicated, all references to an "Article" or "Section" followed by a number or a
letter refer to the specified Article or Section of this Agreement. The terms
"this Agreement," "hereof," "herein" and "hereunder" and similar expressions
refer to this Agreement (including the Schedules hereto) and not to any
particular Article, Section or other portion hereof.

1.3      RULES OF CONSTRUCTION

         Unless otherwise specifically indicated or the context otherwise
requires, (a) all references to "dollars" or "$" mean United States dollars, (b)
words importing the singular shall include the plural and vice versa and words
importing any gender shall include all genders, and (c) "include," "includes"
and "including" shall be deemed to be followed by the words "without
limitation."

1.4      DATE FOR ANY ACTION

         In the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such action shall
be required to be taken on the next succeeding day that is a Business Day.

1.5      SCHEDULES

         The following Schedules are annexed to this Agreement and are hereby
incorporated by reference into this Agreement and form part hereof:


                             COMBINATION AGREEMENT
                                       9
   14

         Schedule A -- Form of Affiliate's Letter 
         Schedule B -- Appropriate Regulatory Approvals 
         Schedule C -- Form of Arrangement Resolution 
         Schedule D -- Form of Westcoast Rights Plan Waiver Resolution 
         Schedule E -- Form of Plan of Arrangement 
         Schedule F -- Form of Support Agreement 
         Schedule G -- Form of Voting and Exchange Trust Agreement

                                    ARTICLE 2

                                 THE ARRANGEMENT

2.1      IMPLEMENTATION STEPS BY WESTCOAST

         Westcoast covenants in favour of the Duke Energy Parties that Westcoast
shall:

         (a) as soon as reasonably practicable, apply in a manner acceptable to
             the Duke Energy Parties, acting reasonably, under Section 192 of
             the CBCA for an order approving the Arrangement and for the Interim
             Order, and thereafter proceed with and diligently seek the Interim
             Order;

         (b) lawfully convene and hold the Westcoast Meeting for the purpose of
             considering the Arrangement Resolution and the Westcoast Rights
             Plan Waiver Resolution (and for no other purpose unless agreed to
             by Duke Energy) as soon as reasonably practicable and use its
             reasonable efforts to convene and hold the Westcoast Meeting on or
             before December 15, 2001, subject to adjournments or postponements
             which may be required pursuant to Section 5.6(a);

         (c) subject to obtaining the approvals as are required by the Interim
             Order, proceed with and diligently pursue the application to the
             Court for the Final Order; and

         (d) subject to obtaining the Final Order and the satisfaction or waiver
             of the other conditions herein contained in favour of each party,
             send to the Director, for endorsement and filing by the Director,
             the Articles of Arrangement and such other documents as may be
             required in connection therewith under the CBCA to give effect to
             the Arrangement.

2.2      IMPLEMENTATION STEPS BY DUKE ENERGY PARTIES

         The Duke Energy Parties covenant in favour of Westcoast that, on or
prior to the Effective Date and subject to the satisfaction or waiver of the
conditions herein contained in favour of each such party:

         (a) Duke Energy, Callco and Exchangeco shall execute and deliver the
             Support Agreement;

         (b) Duke Energy and Exchangeco shall execute and deliver the Voting and
             Exchange Trust Agreement; and


                             COMBINATION AGREEMENT
                                       10
   15

         (c) Duke Energy shall issue to the Trustee such number of Duke Energy
             Common Shares as required by the Voting and Exchange Trust 
             Agreement.

2.3      INTERIM ORDER

         The notice of motion for the application referred to in Section 2.1(a)
shall request that the Interim Order provide, among other things:

         (a) for the class of persons to whom notice is to be provided in
             respect of the Arrangement and the Westcoast Meeting and for the
             manner in which such notice is to be provided;

         (b) that the requisite approval for the Arrangement Resolution shall be
             66 2/3% of the votes cast on the Arrangement Resolution by
             Westcoast Securityholders, voting together as a single class,
             present in person or by proxy at the Westcoast Meeting (such that
             each holder of Westcoast Common Shares is entitled to one vote for
             each Westcoast Common Share held and each holder of Westcoast
             Options is entitled to one vote for each Westcoast Common Share
             such holder of Westcoast Options would have received on a valid
             exercise of Westcoast Options);

         (c) that, in all other respects, the terms, restrictions and conditions
             of the governing documents of Westcoast, including quorum
             requirements and all other matters, shall apply in respect of the
             Westcoast Meeting; and

         (d) for the grant of the Dissent Rights.

2.4      ARTICLES OF ARRANGEMENT

         The Articles of Arrangement shall, together with such other matters as
are necessary to effect the Arrangement, implement the Plan of Arrangement, as a
result of which, among other things, each holder of Westcoast Common Shares will
be entitled to receive (a) the number of Exchangeable Shares per Westcoast
Common Share equal to the Exchange Ratio, (b) the number of Duke Energy Common
Shares per Westcoast Common Share equal to the Exchange Ratio, (c) Cdn$43.80 in
cash, without interest, per Westcoast Common Share, or (d) a combination
thereof, at the option of the holder, subject, in each case to proration in a
manner as may be determined by Duke Energy to provide that approximately 50% of
the aggregate consideration to be received by holders of Westcoast Common Shares
will consist of cash and approximately 50% will consist of Exchangeable Shares
and Duke Energy Common Stock.

2.5      WESTCOAST CIRCULAR

         As promptly as reasonably practicable, Westcoast shall prepare the
Circular together with any other documents required by the Securities Act, the
CBCA or other applicable Laws in connection with the approval of the Arrangement
by the Westcoast Securityholders and Westcoast shall give Duke Energy timely
opportunity to review and comment on all such documentation and all such 


                             COMBINATION AGREEMENT
                                       11
   16
documentation shall be reasonably satisfactory to Duke Energy before it is filed
or distributed to Westcoast Securityholders; provided, that Duke Energy will
provide Westcoast with its comments and any proposed additions and deletions
within five Business Days after each receipt of a draft Circular from Westcoast.
If Duke Energy shall have advised Westcoast in writing of matters required
pursuant to Section 5.2(b)(ii) prior to the Westcoast Meeting, Westcoast shall
disclose such matters in the Circular (including by amendment or supplement to
the Circular if the Circular shall have been previously filed or distributed)
and such disclosure shall be reasonably satisfactory to Duke Energy before it is
filed or distributed to Westcoast Securityholders. As promptly as practicable
after obtaining the Interim Order, Westcoast shall cause the Circular and other
documentation required in connection with the Westcoast Meeting to be sent to
each Westcoast Securityholder and filed as required by the Interim Order and
applicable Laws, and Westcoast will use its reasonable efforts to cause the
Circular to be sent to each Westcoast Securityholder and filed as required by
the Interim Order and applicable Laws on or before November 15, 2001.

2.6      SECURITIES COMPLIANCE

         (a) Duke Energy and Westcoast shall use reasonable best efforts to
             obtain all orders required from the applicable Canadian
             Governmental Entities to permit the issuance and first resale of
             (i) the Exchangeable Shares and Duke Energy Common Shares issuable
             pursuant to the Arrangement, (ii) the Duke Energy Common Shares
             issuable upon exchange of the Exchangeable Shares from time to
             time, and (iii) the Duke Energy Common Shares issuable from time to
             time upon the exercise of the Replacement Options, in each case
             without qualification with, or approval of, or the filing of any
             prospectus or similar document, or the taking of any proceeding
             with, or the obtaining of any further order, ruling or consent
             from, any Canadian Governmental Entity under any Canadian federal,
             provincial or territorial securities or other Laws or pursuant to
             the rules and regulations of any Governmental Entity administering
             such Laws, or the fulfillment of any other legal requirement in any
             such jurisdiction (other than, with respect to such first resales,
             any restrictions on transfer by reason of, among other things, a
             holder being a "control person" for purposes of Canadian federal,
             provincial or territorial securities Laws).

         (b) Duke Energy shall file a registration statement on Form S-3 (or
             other applicable form) (the "Form S-3") in order to register under
             the 1933 Act the Duke Energy Common Shares issuable from time to
             time after the Effective Time upon exchange of the Exchangeable
             Shares and shall use its reasonable best efforts to cause the Form
             S-3 to become effective and to maintain the effectiveness of such
             registration until the date on which no Exchangeable Shares remain
             outstanding (other than those Exchangeable Shares held by Duke
             Energy or any of its affiliates).

         (c) As promptly as practicable after the Effective Date, Duke Energy
             shall file a registration statement on Form S-8 (or other
             applicable form) (the "Form S-8") in order to register under the
             1933 Act those Duke Energy Common Shares issuable from time to time
             after the Effective Time upon the exercise of the Replacement
             Options.

         (d) Duke Energy and Westcoast shall take all such steps as may be
             required to cause the transactions contemplated by this Article 2
             and any other dispositions of Westcoast



                             COMBINATION AGREEMENT
                                       12
   17

             equity securities or acquisitions of Duke Energy equity securities
             (including, in each case derivative securities) in connection with
             this Agreement or the transactions contemplated hereby by any
             individual who is a director or officer of Westcoast, to be exempt
             under Rule 16b-3 promulgated under the Exchange Act.

2.7      PREPARATION OF FILINGS

         (a) Duke Energy and Westcoast shall cooperate in:

             (i)   the preparation of any application for the orders and the
                   preparation of any required registration statements and any
                   other documents reasonably deemed by Duke Energy or Westcoast
                   to be necessary to discharge their respective obligations
                   under United States and Canadian federal, provincial,
                   territorial or state securities Laws in connection with the
                   Arrangement and the other transactions contemplated hereby;

             (ii)  the taking of all such action as may be required under any
                   applicable United States and Canadian federal, provincial,
                   territorial or state securities Laws (including "blue sky
                   laws") in connection with the issuance of the Exchangeable
                   Shares and the Duke Energy Common Shares in connection with
                   the Arrangement or the exercise of the Replacement Options;
                   provided, however, that with respect to the United States
                   "blue sky" and Canadian provincial qualifications neither
                   Duke Energy nor Westcoast shall be required to register or
                   qualify as a foreign corporation or to take any action that
                   would subject it to service of process in any jurisdiction
                   where such entity is not now so subject, except as to matters
                   and transactions arising solely from the offer and sale of
                   the Exchangeable Shares and the Duke Energy Common Shares;
                   and

             (iii) the taking of all such action as may be required under the
                   CBCA in connection with the transactions contemplated by this
                   Agreement and the Plan of Arrangement.

         (b) Each of Duke Energy and Westcoast shall promptly furnish to the
             other all information concerning it and its security holders as may
             be required for the effectuation of the actions described in
             Sections 2.5 and 2.6 and the foregoing provisions of this Section
             2.7, and each covenants that no information furnished by it (to its
             knowledge in the case of information concerning its shareholders)
             in connection with such actions or otherwise in connection with the
             consummation of the Arrangement and the other transactions
             contemplated by this Agreement will contain any misrepresentation
             (as defined in the Securities Act) or any untrue statement of a
             material fact or omit to state a material fact required to be
             stated in any such document or necessary in order to make any
             information so furnished for use in any such document not
             misleading in the light of the circumstances in which it is
             furnished.


                             COMBINATION AGREEMENT
                                       13
   18

         (c) Each of Duke Energy and Westcoast shall promptly notify the other
             if at any time before or after the Effective Time it becomes aware
             that the Circular or an application for an order or a registration
             statement described in Section 2.6 contains any misrepresentation
             (as defined in the Securities Act) or any untrue statement of a
             material fact or omits to state a material fact required to be
             stated therein or necessary to make the statements contained
             therein not misleading in light of the circumstances in which they
             are made, or that otherwise requires an amendment or supplement to
             the Circular or such application or registration statement. In any
             such event, Duke Energy and Westcoast shall cooperate in the
             preparation of a supplement or amendment to the Circular or such
             other document, as required and as the case may be, and, if
             required, shall cause the same to be distributed to the Westcoast
             Securityholders or filed with the relevant securities regulatory
             authorities.

         (d) Westcoast shall ensure that the Circular complies with all
             applicable Laws and, without limiting the generality of the
             foregoing, that the Circular does not contain any misrepresentation
             (as defined in the Securities Act) or any untrue statement of a
             material fact or omit to state a material fact required to be
             stated therein or necessary to make the statements contained
             therein not misleading in light of the circumstances in which they
             are made (other than with respect to any information relating to
             and provided by the Duke Energy Parties). Without limiting the
             generality of the foregoing, Westcoast shall ensure that the
             Circular complies with OSC Rule 54-501 and provides Westcoast
             Securityholders with information in sufficient detail to permit
             them to form a reasoned judgment concerning the matters to be
             placed before them at the Westcoast Meeting.

         (e) Duke Energy shall ensure that the Form S-3 and Form S-8 comply with
             all applicable Laws and, without limiting the generality of the
             foregoing, that such documents do not contain any untrue statement
             of a material fact or omit to state a material fact required to be
             stated therein or necessary to make the statements contained
             therein not misleading in light of the circumstances in which they
             are made (other than with respect to any information relating to
             and provided by Westcoast).

                                   ARTICLE 3

                   REPRESENTATIONS AND WARRANTIES OF WESTCOAST

         Westcoast represents and warrants to the Duke Energy Parties as follows
in each case except as set forth in the Westcoast Disclosure Letter (each of
which exceptions shall specifically identify the relevant section hereof to
which it relates):

3.1      ORGANIZATION AND STANDING

         (a) Each of Westcoast and its subsidiaries has been duly organized or
             formed and is validly existing under the Laws of its jurisdiction
             of organization or formation with full corporate or legal power and
             authority to own, lease and operate its properties and to conduct
             its businesses as currently owned and conducted except where,
             individually or in the aggregate, the failure of a subsidiary other
             than a Material



                             COMBINATION AGREEMENT
                                       14
   19

             Subsidiary to be so organized, formed or existing or to have such
             power or authority would not have a Material Adverse Effect on
             Westcoast. Each of Westcoast and its subsidiaries is duly qualified
             to do business in each jurisdiction in which the nature of the
             business conducted by it or the ownership or leasing of its
             properties requires it to so qualify, except where, individually or
             in the aggregate, the failure to be so qualified would not have a
             Material Adverse Effect on Westcoast.

         (b) Section 3.1 of the Westcoast Disclosure Letter sets forth, as of
             the date hereof, a true and complete list of each of Westcoast's
             subsidiaries and Partially Owned Entities, together with (i) the
             nature of the legal organization of such person, (ii) the
             jurisdiction of organization or formation of such person, (iii) the
             name of each Westcoast related person that owns beneficially or of
             record any equity or similar interest in such person, and (iv) the
             percentage interest owned by Westcoast or any of its subsidiaries
             in such person. Neither Westcoast nor any of its subsidiaries is
             subject to any obligation in excess of $10 million to provide funds
             to or make any investment in (in the form of a loan, capital
             contribution or otherwise) any subsidiary, Partially Owned Entity
             or other person other than Westcoast or a wholly owned subsidiary
             of Westcoast.

         (c) Westcoast has heretofore made available to Duke Energy complete and
             correct copies of its governing documents as well as the governing
             documents of each of its subsidiaries and Partially Owned Entities,
             in each case as in effect on the date hereof.

3.2      CAPITALIZATION

         (a) The authorized capital of Westcoast consists of (i) an unlimited
             number of First Preferred Shares and Second Preferred Shares, each
             issuable in series, and (ii) an unlimited number of Westcoast
             Common Shares and there were 4,588,687 First Preferred Shares,
             Series 2, 8,000,000 First Preferred Shares, Series 5, 5,000,000
             First Preferred Shares, Series 6, 6,000,000 First Preferred Shares,
             Series 7, 6,000,000 First Preferred Shares, Series 8, and 5,000,000
             First Preferred Shares, Series 9, issued and outstanding and no
             Second Preferred Shares issued and outstanding as of September 15,
             2001. As of September 15, 2001, there were 123,400,430 Westcoast
             Common Shares issued and outstanding and no Westcoast Common Shares
             held in its treasury or by any subsidiary of Westcoast. As of
             August 31, 2001, there were outstanding Westcoast Options
             permitting the holders thereof to purchase 5,092,893 Westcoast
             Common Shares in the aggregate. As of August 31, 2001, there were
             1,984,469 Westcoast Common Shares reserved for issuance under the
             Westcoast Stock Option Plans. As of July 31, 2001, there were
             5,900,587 Westcoast Common Shares reserved for issuance under the
             Westcoast Dividend Reinvestment Plan. From September 15, 2001 to
             the date hereof, no First Preferred Shares, Second Preferred Shares
             or Westcoast Common Shares have been issued by Westcoast or
             purchased by Westcoast or any of its subsidiaries; from July 31,
             2001 to the date hereof, no First Preferred Shares, Second
             Preferred Shares or Westcoast Common Shares have been reserved by
             Westcoast; and from August 31, 2001 to the date hereof no Westcoast
             Options have been granted.

         (b) All of the Westcoast Common Shares and First Preferred Shares have
             been duly authorized and are validly issued and fully paid and
             non-assessable, were not issued in violation of pre-emptive or
             similar rights or any other agreement or understanding



                             COMBINATION AGREEMENT
                                       15
   20

             binding upon Westcoast and were issued in compliance with the CBCA,
             all applicable securities Laws and the governing documents of
             Westcoast. All of the outstanding shares and other ownership
             interests of the subsidiaries, the Partially Owned Entities of
             Westcoast, Maritimes & Northeast Pipeline and P.T. Puncakjaya Power
             which are held, directly or indirectly, by Westcoast have been (to
             the knowledge of Westcoast in the case of Partially Owned Entities,
             Maritimes & Northeast Pipeline and P.T. Puncakjaya Power) duly
             authorized and are validly issued, fully paid and non-assessable,
             were not issued in violation of pre-emptive or similar rights and
             all such shares and other ownership interests are owned directly or
             indirectly by Westcoast, free and clear of all liens, claims or
             encumbrances, except for restrictions on transfers contained in
             governing documents and except where, individually or in the
             aggregate, the failure of the shares or ownership interest in a
             subsidiary other than a Material Subsidiary to be so authorized or
             issued or owned free and clear would not have a Material Adverse
             Effect on Westcoast.

         (c) Except as described in Section 3.2(a) above, as of the date hereof,
             there are no outstanding options, warrants, subscriptions, puts,
             calls or other rights, agreements, arrangements or commitments
             (pre-emptive, contingent or otherwise) obligating Westcoast or any
             of its subsidiaries to offer, issue, sell, redeem, repurchase,
             otherwise acquire or transfer, pledge or encumber any capital stock
             of Westcoast, any of its subsidiaries, Partially Owned Entities,
             Maritimes & Northeast Pipeline or P.T. Puncakjaya Power nor are
             there outstanding any securities or obligations of any kind of
             Westcoast or any of its subsidiaries which are convertible into or
             exerciseable or exchangeable for any capital stock of Westcoast,
             any of its subsidiaries or any other person and neither Westcoast
             nor any of its subsidiaries or, to the knowledge of Westcoast, any
             of its Partially Owned Entities has any obligation of any kind to
             issue any additional securities or to pay for or repurchase any
             securities. There are not outstanding as of the date hereof any
             stock appreciation rights, phantom equity or similar rights,
             agreements, arrangements or commitments based upon the book value,
             income or any other attribute of Westcoast or any of its
             subsidiaries. There are no outstanding bonds, debentures or other
             evidences of indebtedness of Westcoast or any of its subsidiaries
             having the right to vote (or that are exchangeable or convertible
             for or exercisable into securities having the right to vote) with
             the holders of the Westcoast Common Shares on any matter. As of the
             date hereof, there are no stockholder agreements, proxies, voting
             trusts, rights to require registration under securities Laws or
             other arrangements or commitments to which Westcoast or any of its
             subsidiaries is a party or bound with respect to the voting,
             disposition or registration of any outstanding securities of
             Westcoast, any of its subsidiaries or any of its Partially Owned
             Entities.

         (d) Since June 30, 2001, except for issuances of Westcoast Common
             Shares pursuant to Westcoast Options granted prior to the date
             hereof, pursuant to the Westcoast Dividend Reinvestment Plan and
             upon conversion of First Preferred Shares pursuant to their terms,
             there have been no Westcoast capital stock, voting securities or
             securities convertible or exchangeable therefor issued or purchased
             for cancellation.


                             COMBINATION AGREEMENT
                                       16
   21

3.3      AUTHORITY AND NO CONFLICTS

         (a) Westcoast has all requisite corporate power and authority to enter
             into this Agreement and to perform its obligations hereunder and to
             consummate the transactions contemplated hereby, subject to the
             approval of Westcoast's Securityholders and the Court as provided
             in this Agreement with respect to the Plan of Arrangement. The
             execution and delivery of this Agreement by Westcoast and the
             consummation by Westcoast of the transactions contemplated by this
             Agreement have been duly and validly authorized by all necessary
             corporate action and no other corporate proceedings on the part of
             Westcoast are necessary to authorize this Agreement or to
             consummate the transactions contemplated hereby other than, with
             respect to the Westcoast Rights Plan Waiver Resolution, approval of
             the holders of Westcoast Common Shares and with respect to the
             completion of the Arrangement, the approval of the Westcoast
             Securityholders and the Court and the filing of such corporate
             documents under the CBCA as are provided for in this Agreement.

         (b) This Agreement has been duly executed and delivered by Westcoast
             and constitutes its legal, valid and binding obligation,
             enforceable against it in accordance with its terms, except as the
             same may be limited by bankruptcy, insolvency and other applicable
             Laws affecting creditors' rights generally, and by general
             principles of equity.

         (c) The Board of Directors of Westcoast at a meeting duly called and
             held has determined by the unanimous approval of all directors
             voting (A) that this Agreement and the transactions contemplated
             hereby, including the Arrangement and the Westcoast Rights Plan
             Waiver Resolution, are fair to the Westcoast Securityholders and
             are in the best interests of Westcoast and (B) to recommend that
             the Westcoast Securityholders vote in favour of the Arrangement and
             the Westcoast Rights Plan Waiver Resolution.

         (d) Neither the execution and delivery of this Agreement by Westcoast
             nor the performance by it of its obligations hereunder and the
             completion of the transactions contemplated hereby, will:

             (i)   conflict with, or violate any provision of, the governing
                   documents of Westcoast or any of its subsidiaries or
                   Partially Owned Entities;

             (ii)  subject to the consents, approvals, orders, authorizations,
                   registrations, declarations or filings referred to in Section
                   3.4 being made or obtained, violate or breach any Laws
                   applicable to Westcoast, any of its subsidiaries or, to the
                   knowledge of Westcoast, any of its Partially Owned Entities;

             (iii) subject to the consents, approvals, orders, authorizations,
                   registrations, declarations or filings referred to in Section
                   3.4 being made or obtained, violate or conflict with or
                   result in the breach of, or constitute a default (or an event
                   that with the giving of notice, the passage of time, or both
                   would constitute a default) under, or entitle any party (with
                   the giving of notice, the



                             COMBINATION AGREEMENT
                                       17
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                   passage of time or both) to terminate, accelerate, modify or
                   call any obligations or rights under any credit agreement,
                   note, bond, mortgage, indenture, deed of trust, contract,
                   agreement, lease, license, franchise, permit, concession,
                   easement or other instrument to which Westcoast or any of
                   its subsidiaries or, to the knowledge of Westcoast, any of
                   its Partially Owned Entities is a party or by which
                   Westcoast or any of its subsidiaries or, to the knowledge of
                   Westcoast, any of its Partially Owned Entities or its or
                   their property is bound or subject; or

             (iv)  result in the imposition of any encumbrance, charge or lien
                   upon or require the sale or give any person the right to
                   acquire any of Westcoast's assets or the assets of any of its
                   subsidiaries or, to the knowledge of Westcoast, any of its
                   Partially Owned Entities, or restrict, hinder, impair or
                   limit the ability of Westcoast, or any of its subsidiaries
                   or, to the knowledge of Westcoast, any of its Partially Owned
                   Entities to carry on the business of Westcoast, any of its
                   subsidiaries or any of its Partially Owned Entities as and
                   where it is now being carried on;

         except in the case of clauses (ii) through (iv) for any of the
         foregoing that would not, individually or in the aggregate, have a
         Material Adverse Effect on Westcoast or materially impair the ability
         of Westcoast to perform its obligations hereunder or prevent or
         materially delay the consummation of any of the transactions
         contemplated hereby.

3.4      CONSENTS; APPROVALS

         No consent, approval, order or authorization of, or registration,
declaration or filing with, any third party or Governmental Entity is required
by or with respect to Westcoast, any of its subsidiaries or, to the knowledge of
Westcoast, any of its Partially Owned Entities in connection with the execution
and delivery of this Agreement by Westcoast, the performance of its obligations
hereunder or the consummation by Westcoast of the transactions contemplated
hereby other than (a) any approvals required by the Interim Order, (b) the Final
Order, (c) the approval of the Arrangement by the Westcoast Securityholders, (d)
such registrations and other actions required under federal, state, provincial,
and territorial securities Laws as are contemplated by this Agreement, (e) any
filings with the Director under the CBCA, (f) the Appropriate Regulatory
Approvals relating to Westcoast and to the extent required, the New York Public
Services Commission, and (g) any other consents, approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or
made, would not, individually or in the aggregate, have a Material Adverse
Effect on Westcoast or prevent or materially delay the consummation of any of
the transactions contemplated hereby or materially impair Westcoast's ability to
perform its obligations hereunder.

3.5      NO DEFAULTS

         None of Westcoast or any of its Material Subsidiaries or, to the
knowledge of Westcoast, any of its Partially Owned Entities or any other party
thereto, is in default under or violation of, and there has been no event,
condition or occurrence which, after notice or lapse of time or both, would
constitute such a default or violation of, or permit the termination of, any
term, condition 



                             COMBINATION AGREEMENT
                                       18
   23

or provision of (a) their respective governing documents, (b) any credit
agreement, note, bond, mortgage, indenture, contract, agreement, lease, license,
franchise, permit, concession, easement or other instrument to which Westcoast
or any of its subsidiaries or, to the knowledge of Westcoast, any of its
Partially Owned Entities, is a party or by which Westcoast, any of its
subsidiaries or, to the knowledge of Westcoast, any of its Partially Owned
Entities, or any of its or their property is bound or subject, except, in the
case of clause (b), defaults, violations and terminations which, individually or
in the aggregate, would not have a Material Adverse Effect on Westcoast.

3.6      ABSENCE OF CERTAIN CHANGES OR EVENTS

         (a) Except as disclosed in the Westcoast SRA Reports or Westcoast SEC
             Reports filed prior to the date hereof, since December 31, 2000,
             Westcoast, its subsidiaries and, to the knowledge of Westcoast, its
             Partially Owned Entities, have conducted their respective
             businesses only in the ordinary course in a manner consistent with
             past practice and there has been no Material Adverse Effect with
             respect to Westcoast or any event, occurrence or development which
             would be reasonably expected to have a Material Adverse Effect on
             Westcoast or which materially and adversely affects the ability of
             Westcoast to consummate the transactions contemplated hereby.

         (b) Except as disclosed in the Westcoast SRA Reports or Westcoast SEC
             Reports filed prior to the date hereof, since December 31, 2000,
             none of Westcoast or any of its subsidiaries, or, to the knowledge
             of Westcoast, its Partially Owned Entities, has engaged in any
             conduct that is proscribed during the Pre-Effective Date Period by
             Section 5.1.

3.7      EMPLOYMENT MATTERS

         (a) Except as set forth in the management proxy circular prepared in
             connection with the Annual Meeting of Westcoast held on April 25,
             2001 or Section 3.7 of the Westcoast Disclosure Letter, neither
             Westcoast nor any of its subsidiaries is a party to any written or
             oral policy, agreement, obligation or understanding providing for
             severance or termination payments to, or any employment agreement
             with, any former or current director, officer or employee other
             than any agreement which applies to only one individual and which
             does not provide for payment to such individual in excess of
             $150,000 in any one calendar year and other than as required by
             applicable Law for employees without agreements as to notice or
             severance or pursuant to collective bargaining agreements.

         (b) Neither Westcoast nor any of its subsidiaries is a party to any
             consulting contract, written or oral, providing for compensation of
             any individual in excess of $350,000 per calendar year.

         (c) Neither Westcoast nor any of its subsidiaries has agreed to
             recognize any union or other collective bargaining representative,
             nor has any union or other collective bargaining representative
             been certified as the exclusive bargaining representative of any of
             Westcoast's or any of its subsidiaries' employees. No labor union
             or



                             COMBINATION AGREEMENT
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   24

             representative of the employees of Westcoast or any of its
             subsidiaries claims to be seeking to represent employees of
             Westcoast or any of its subsidiaries other than those that are
             parties to executed collective bargaining agreements identified in
             Section 3.7 of the Westcoast Disclosure Letter. To the knowledge of
             Westcoast, no union organizational campaign or representation
             petitions are currently pending with respect to any of the
             employees of Westcoast or any of its subsidiaries or Partially
             Owned Entities. Neither Westcoast nor any of its subsidiaries is a
             party to, or bound by, any collective bargaining agreement or any
             other labor contract applicable to any employees of Westcoast or
             its subsidiaries. All collective bargaining agreements to which
             Westcoast is a party have been duly ratified and there are no
             written or oral agreements which modify the terms of any such
             collective bargaining agreement. No collective bargaining
             agreements or other labor contracts relating to employees of
             Westcoast or its subsidiaries are being negotiated. To the
             knowledge of Westcoast, neither Westcoast nor any of its
             subsidiaries have breached any of their obligations under any
             collective bargaining agreements that would have a Material Adverse
             Effect on Westcoast. There is no labor strike or labor dispute,
             slowdown, lockout or stoppage actually pending or threatened
             against or affecting Westcoast or its subsidiaries, individually or
             in the aggregate, that would be reasonably expected to have a
             Material Adverse Effect on Westcoast, and Westcoast and its
             subsidiaries have not experienced any labor strikes or labor
             disputes, slowdowns, lockouts or stoppages since December 31, 1998,
             that had a Material Adverse Effect on Westcoast. To the knowledge
             of Westcoast, no union or collective bargaining representative has
             applied to have Westcoast or any of its subsidiaries declared a
             related or successor employer pursuant to applicable labor Laws.

         (d) All employees and former employees of Westcoast and its
             subsidiaries have been, or will have been on or before the
             Effective Date, paid or amounts in respect thereof shall have been
             accrued for wages, salaries, commissions, bonuses, vacation pay,
             severance and termination pay, sick pay, and other compensation for
             all services performed by them or that was accrued by them up to
             the Effective Date, in accordance with the obligations of Westcoast
             and its subsidiaries under any employment or labor practices and
             policies or any collective bargaining agreement or individual
             agreement to which Westcoast or its subsidiaries is a party, or by
             which Westcoast or its subsidiaries may be bound, except for, in
             the case of severance and termination pay, statutory and common law
             requirements for payment in lieu of reasonable notice of
             termination.

         (e) There are no current, pending or, to the knowledge of Westcoast,
             threatened proceedings before any board or tribunal or claims with
             respect to employment and labor Laws, including, but not limited
             to, employment and labor standards, unfair labor practices,
             employment discrimination, occupational health and safety,
             employment equity, pay equity, workers' compensation, human rights
             and labor relations, other than such proceedings and claims which,
             individually or in the aggregate, would not have a Material Adverse
             Effect on Westcoast. Westcoast and its subsidiaries are not subject
             to any settlement agreement, conciliation agreement, letter of
             commitment, deficiency letter or consent decree with any present or
             former employee or applicant for employment, labor union or other
             employee representative,



                             COMBINATION AGREEMENT
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   25

             or any Government Entity or arbitrator relating to claims of unfair
             labor practices, employment discrimination, or other claims with
             respect to employment and labor practices and policies that would
             have a Material Adverse Effect on Westcoast, and no Government
             Entity or arbitrator has issued a judgment, order, decree,
             injunction, decision, award or finding with respect to the
             employment and labor practices or policies of Westcoast or its
             subsidiaries which currently has or would be reasonably expected to
             have a Material Adverse Effect on Westcoast. There are no
             outstanding assessments, penalties, fines, liens, charges,
             surcharges, or other amounts due and owing pursuant to any
             workplace safety and insurance legislation by Westcoast or any of
             its subsidiaries and they have not been reassessed in any material
             respect under such legislation during the past three years and, to
             the knowledge of Westcoast, no audit is currently being performed
             pursuant to any applicable workplace safety and insurance
             legislation. There are no claims or, to the knowledge of Westcoast,
             potential claims which may materially and adversely affect accident
             cost experience.

3.8      REPORTS; FINANCIAL STATEMENTS

         (a) Since January 1, 1998, Westcoast and its subsidiaries have timely
             filed all forms, reports, schedules, statements and other documents
             required to be filed with (i) Canadian securities regulatory
             authorities (collectively the "Westcoast SRA Reports"), (ii) the
             SEC under the Exchange Act or the 1933 Act (collectively the
             "Westcoast SEC Reports"), (iii) any other applicable state,
             provincial or territorial securities authority, and (iv) any other
             Governmental Entity, except in each case where the failure to file
             any such forms, reports, schedules, statements or other documents
             would not have a Material Adverse Effect on Westcoast (all such
             forms, reports, schedules, statements and other documents are
             collectively referred to as the "Westcoast Documents"). The
             Westcoast Documents at the time filed (x) did not contain any
             misrepresentation (as defined in the Securities Act), (y) did not
             contain any untrue statement of a material fact or omit to state a
             material fact required to be stated therein or necessary in order
             to make the statements contained therein not misleading in light of
             the circumstances under which they were made and (z) complied in
             all material respects with the requirements of applicable Laws
             (including, with respect to the Westcoast SEC Reports, the 1933
             Act, the Exchange Act and the rules and regulations thereunder).
             Westcoast has not filed any confidential material change report
             with the OSC or any other securities authority or regulator or any
             stock exchange or other self-regulatory authority that at the date
             hereof remains confidential.

         (b) The consolidated financial statements (including, in each case, any
             related notes thereto) contained in any Westcoast SRA Reports or
             Westcoast SEC Reports (i) have been prepared in accordance with
             Canadian generally accepted accounting principles applied on a
             consistent basis during the periods involved (subject, in the case
             of unaudited financial statements, to the absence of notes in the
             case of Westcoast SRA Reports filed prior to the implementation of
             OSC Rule 51-501), (ii) complied in all material respects with the
             requirements of applicable securities Laws, and (iii) fairly
             present, in all material respects, the consolidated financial
             position, results of operations and cash flows of Westcoast and its
             subsidiaries as of the respective dates


                             COMBINATION AGREEMENT
                                       21
   26

             thereof and for the respective periods covered thereby, subject, in
             the case of unaudited financial statements, to normal, recurring
             audit adjustments none of which will be material.

         (c) From January 1, 1998 to the date of this Agreement, there has been
             no change by Westcoast or its subsidiaries in their accounting
             policies, methods, practices or principles that are material to
             Westcoast's consolidated financial statements, except as described
             in the notes thereto with respect to periods ending prior to the
             date hereof.

3.9      CONTRACTS

         Section 3.9 of the Westcoast Disclosure Letter lists (without
specifically identifying the subsection of this Section 3.9 to which they
relate) as of the date hereof all written or oral contracts, agreements,
guarantees, leases and executory commitments other than Westcoast Plans to which
Westcoast or any of its subsidiaries is a party and which fall within any of the
following categories: (a) contracts not entered into in the ordinary course of
Westcoast's and its subsidiaries' business other than those that are not
material to the business of Westcoast and its subsidiaries, (b) contracts
containing covenants purporting to limit the freedom of Westcoast or any of its
subsidiaries to compete in any line of business in any geographic area or to
hire any individual or group of individuals, (c) contracts which after the
Effective Time would have the effect of limiting the freedom of Duke Energy or
its subsidiaries (other than Westcoast and its subsidiaries) to compete in any
line of business in any geographic area or to hire any individual or group of
individuals, (d) purchase contracts involving in excess of $25 million per year
which restrict or limit the purchasing relationships of Westcoast or its
subsidiaries, (e) contracts relating to any outstanding commitment for capital
expenditures in excess of $100 million other than capital expenditures included
in the 2001 capital expenditures budget that was previously approved by the
Board of Directors of Westcoast and which was provided to Duke Energy or which
were reported to the Board of Directors of Westcoast in the Second Quarter 2001
Outlook previously provided to Duke Energy, (f) contracts with any labor
organization or union, (g) except as reflected in the Westcoast financial
statements included in the Westcoast SRA Reports for the period ended June 30,
2001, indentures, mortgages, liens, promissory notes, loan agreements,
guarantees or other arrangements relating to the borrowing of money by Westcoast
or its subsidiaries in excess of $100 million, (h) contracts providing for
"earn-outs", "savings guarantees", "performance guarantees", or other contingent
payments by Westcoast or any of its subsidiaries involving more than $100
million per year or $250 million over the term of the contract, (i)
confidentiality or standstill agreements with any person (the effectiveness of
which extends beyond the date that is six months following the date hereof) that
restrict Westcoast or any of its subsidiaries in the use of any information or
the taking of any actions by Westcoast or its subsidiaries entered into in
connection with the consideration by Westcoast or any of its subsidiaries of any
acquisition of equity interests or assets, (j) contracts containing provisions
triggered by a change of control of Westcoast or other similar provisions, (k)
contracts in favour of directors or officers that provide rights to
indemnification and (l) contracts that are material to Westcoast and its
subsidiaries taken as a whole other than those that are covered by (a) through
(k) of this Section 3.9 or filed in the Westcoast SRA Reports or Westcoast SEC
Reports filed prior to the date hereof. All such contracts and all other
contracts that are individually material to the business or operations of
Westcoast and its subsidiaries are valid and binding obligations 



                             COMBINATION AGREEMENT
                                       22
   27

of Westcoast or such subsidiaries that are parties thereto and, to the knowledge
of Westcoast, the valid and binding obligation of each other party thereto
except such contracts which if not so valid and binding would not, individually
or in the aggregate, have a Material Adverse Effect on Westcoast.

3.10     LITIGATION

         There are no claims, actions, proceedings or investigations pending or,
to the knowledge of Westcoast, threatened against Westcoast or any of its
subsidiaries or Partially Owned Entities before any Governmental Entity (and
Westcoast, its subsidiaries and, to the knowledge of Westcoast, its Partially
Owned Entities, have no knowledge of any facts that are likely to give rise to
any such claim, action, proceeding or investigation) that would be reasonably
expected to have a Material Adverse Effect on Westcoast, or prevent or
materially delay consummation of the transactions contemplated by this
Agreement. Neither Westcoast nor any of its subsidiaries, nor their respective
assets and properties, is subject to any outstanding judgment, order, writ,
injunction or decree that has had or would be reasonably expected to have a
Material Adverse Effect on Westcoast or that would prevent or materially delay
consummation of the transactions contemplated by this Agreement.

3.11     ENVIRONMENTAL

         Except for any matters which individually or in the aggregate are not
reasonably likely to result in an expenditure or liability in excess of $20
million:

         (a) all operations of Westcoast and its subsidiaries and, to the
             knowledge of Westcoast, any of its Partially Owned Entities have
             been conducted, and are now, in compliance with all Environmental
             Laws;

         (b) Westcoast and its subsidiaries and, to the knowledge of Westcoast,
             its Partially Owned Entities are in possession of, and in
             compliance with, all permits, authorizations, certificates,
             registrations, approvals and consents necessary under Environmental
             Laws to own, lease and operate their properties and to conduct
             their respective businesses as they are now being conducted or as
             proposed to be conducted (collectively the "Westcoast Environmental
             Permits"); and

         (c) neither Westcoast nor any of its subsidiaries or, to the knowledge
             of Westcoast, any of its Partially Owned Entities is subject to:

             (i)   any Environmental Laws that require any work, repairs,
                   construction, change in business practices or operations, or
                   expenditures, including capital expenditures for facility
                   upgrades, environmental investigation and remediation
                   expenditures, or any other such expenditures;

             (ii)  any written demand or written notice alleging breach of or
                   with respect to liability under any Environmental Laws
                   applicable to Westcoast, any subsidiary of Westcoast or any
                   of its Partially Owned Entities, including any regulations
                   respecting the use, storage, treatment, transportation or
                   disposition (including disposal or arranging for disposal) of
                   Hazardous Substances;


                             COMBINATION AGREEMENT
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   28

             (iii) any written demand or written notice with respect to
                   liability, by contract or operation of Environmental Laws
                   applicable to Westcoast or any current or former subsidiary
                   of Westcoast or any of its Partially Owned Entities or any of
                   their respective predecessor entities, divisions or any
                   formerly owned, leased or operated properties or assets of
                   the foregoing, including liability with respect to the
                   presence, release, threatened release or discharge of
                   Hazardous Substances; or

             (iv)  any changes in the terms or conditions of any Westcoast
                   Environmental Permits or any renewal (other than renewals in
                   the ordinary course on the expiry of permits), modification,
                   revocation, reissuance, alteration or amendment of such
                   Westcoast Environmental Permits that are required in
                   connection with the execution or delivery of this Agreement,
                   the consummation of the transactions contemplated hereby or
                   the continuation of business of Westcoast or any subsidiaries
                   of Westcoast or, to the knowledge of Westcoast, any of its
                   Partially Owned Entities following such consummation.

3.12     TAX MATTERS

         (a) Westcoast and each of its subsidiaries have timely filed, or caused
             to be filed, all material Tax Returns required to be filed by them
             (all of which returns were correct and complete in all material
             respects), have timely paid, or caused to be paid, Taxes shown to
             be due and payable thereon, and have satisfied in full in all
             respects all Tax withholding, deposit and remittance requirements
             imposed on or with respect to any of Westcoast and its
             subsidiaries, and Westcoast's most recently published financial
             statements contain an adequate provision in accordance with
             Canadian generally accepted accounting principles for all material
             amounts of Taxes payable in respect of each period covered by such
             financial statements and all prior periods to the extent such Taxes
             have not been paid, whether or not due and whether or not shown as
             being due on any Tax Returns. Westcoast and each of its
             subsidiaries have made adequate provision in accordance with
             Canadian generally accepted accounting principles in their books
             and records for any amount of Taxes material to Westcoast on a
             consolidated basis and accruing in respect of any accounting period
             ending subsequent to the period covered by such financial
             statements.

         (b) Neither Westcoast nor any subsidiary of Westcoast has received any
             written notification that any issue involving an amount of Taxes
             material to Westcoast on a consolidated basis has been raised (and
             is currently pending) by the Canada Customs and Revenue Agency, the
             United States Internal Revenue Service or any other taxing
             authority, including, without limitation, any sales tax authority,
             in connection with any of the Tax Returns filed or required to be
             filed, and no waivers of statutes of limitations or objections to
             any assessments or reassessments involving an amount of Taxes
             material to Westcoast on a consolidated basis have been given,
             filed or requested with respect to Westcoast or any subsidiary of
             Westcoast. All liability of Westcoast and its subsidiaries for
             Canadian federal and provincial income and capital taxes has been
             assessed by the Canada Customs and Revenue Agency and, where


                             COMBINATION AGREEMENT
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   29


             applicable, Canadian provincial tax authorities for all fiscal
             years up to and including the fiscal year ended December 31, 1999.
             Neither Westcoast nor any of its subsidiaries has received any
             notice from any taxing authority to the effect that any Tax Return
             is being examined, and Westcoast has no knowledge of any Tax audit
             or issue that would be reasonably expected to have a Material
             Adverse Effect on Westcoast. There are no proposed (but unassessed)
             additional Taxes applicable to Westcoast or any of its subsidiaries
             or, to the knowledge of Westcoast, any of its Partially Owned
             Entities, involving an amount of Taxes material to Westcoast on a
             consolidated basis and none has been asserted against Westcoast or
             any of its subsidiaries or, to the knowledge of Westcoast, any of
             its Partially Owned Entities. There are no Tax liens on any assets
             of Westcoast or any of its subsidiaries except for Taxes not yet
             due and payable and those which would not be reasonably expected to
             result in a Material Adverse Effect on Westcoast. Neither Westcoast
             nor any of its subsidiaries has received a refund of any Taxes to
             which it was not entitled. Neither Westcoast nor any of its
             subsidiaries (i) has made an election to be treated as a
             "consenting corporation" under Section 341(f) of the United States
             Internal Revenue Code of 1986 (the "Code") or (ii) is a party to
             any Tax sharing or other similar agreement or arrangement or any
             Tax indemnification agreement of any nature with any other person
             (other than in agreements with Westcoast or any of its
             subsidiaries) pursuant to which Westcoast or any of its
             subsidiaries has or could have any material liabilities in respect
             of Taxes. Westcoast has not made an election under Section 897(i)
             of the Code to be treated as a domestic corporation for purposes of
             Sections 897, 1445 and 6039C of the Code.

         (c) "Tax" and "Taxes" means, with respect to any person, all income
             taxes (including any tax on or based upon net income, gross income,
             income as specially defined, earnings, profits or selected items of
             income, earnings or profits) and all capital taxes, gross receipts
             taxes, environmental taxes, sales taxes, use taxes, ad valorem
             taxes, value added taxes, transfer taxes, franchise taxes, license
             taxes, withholding taxes, payroll taxes, employment taxes, pension
             plan premiums, excise, severance, social security premiums,
             workers' compensation premiums, unemployment insurance or
             compensation premiums, stamp taxes, occupation taxes, premium
             taxes, property taxes, windfall profits taxes, alternative or
             add-on minimum taxes, goods and services tax, customs duties or
             other taxes, fees, imports, assessments or charges of any kind
             whatsoever, together with any interest and any penalties or
             additional amounts imposed by any taxing authority (domestic or
             foreign) on such entity, and any interest, penalties, additional
             taxes and additions to tax imposed with respect to the foregoing.

3.13     PENSION AND EMPLOYEE BENEFITS

         (a) Section 3.13 of the Westcoast Disclosure Letter sets forth a list
             of all employee benefit, health, welfare, supplemental unemployment
             benefit, bonus, incentive, pension, profit sharing, deferred
             compensation, stock compensation, stock option, stock purchase,
             retirement, hospitalization insurance, medical, dental, legal,
             disability and similar plans or arrangements or practices, whether
             written or oral, which are sponsored, maintained or contributed to
             by Westcoast or any of its subsidiaries


                             COMBINATION AGREEMENT
                                       25
   30


             (collectively referred to as the "Westcoast Plans"). The Westcoast
             Disclosure Letter states which of the Westcoast Plans are subject
             to the provisions of the United States Employee Retirement Income
             Security Act of 1974, as amended ("ERISA"). For purposes of this
             Section 3.13, a subsidiary of Westcoast shall be deemed to also
             include each corporation, trade, business, or entity that would be
             considered to be a single employer or under common control with
             Westcoast pursuant to Section 414 of the Code or Section 4001 of
             ERISA.

         (b) No step has been taken, no event has occurred and no condition or
             circumstance exists that has resulted in or could be reasonably
             expected to result in any Westcoast Plan being ordered or required
             to be terminated or wound up in whole or in part or having its
             registration under applicable Laws refused or revoked, or being
             placed under the administration of any trustee or receiver or
             regulatory authority or being required to pay any material amount
             of Taxes, fees, penalties or levies under applicable Laws. There
             are no actions, suits, claims (other than routine claims for
             payment of benefits in the ordinary course), trials, demands,
             investigations, arbitrations or other proceedings which are pending
             or threatened in respect of any of the Westcoast Plans or their
             assets which individually or in the aggregate would have a Material
             Adverse Effect on Westcoast.

         (c) Westcoast has provided to Duke Energy true, correct and complete
             copies of all of the Westcoast Plans as amended (or, in the case of
             any unwritten Westcoast Plan, a description thereof) together with
             all related actuarial reports, and Westcoast has made available to
             Duke Energy all other related documentation including, without
             limitation, funding agreements, trust agreements, funding and
             financial information returns and statements with respect to each
             Westcoast Plan, and current plan summaries, booklets and personnel
             manuals. Westcoast has provided to Duke Energy a true and complete
             copy of (i) the most recent annual report on Form 5500 filed with
             the United States Internal Revenue Service with respect to each
             Westcoast Plan in respect of which such a report was required and
             (ii) the most recent annual information return filed with the
             Canada Customs and Revenue Agency with respect to each Westcoast
             Plan in respect of which such a return was required.

         (d) All of the Westcoast Plans are and have been established,
             registered, qualified, invested and administered, in all material
             respects, in accordance with all applicable Laws, and in accordance
             with their terms and the terms of agreements between Westcoast or a
             subsidiary of Westcoast, as the case may be, and their respective
             employees. No fact or circumstance exists that could adversely
             affect the existing tax status of a Westcoast Plan.

         (e) All obligations of Westcoast or a subsidiary of Westcoast regarding
             the Westcoast Plans have been satisfied in all material respects.
             All contributions or premiums required to be made by Westcoast or a
             subsidiary of Westcoast, as the case may be, under the terms of
             each Westcoast Plan or by applicable Laws have been made in a
             timely fashion in accordance with applicable Laws and the terms of
             the Westcoast Plans.


                             COMBINATION AGREEMENT
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   31


         (f) Each Westcoast Plan is fully insured or fully funded (both on a
             going-concern and solvency basis) and in good standing with such
             regulatory authorities as may be applicable and, as of the date
             hereof, no notice of underfunding, noncompliance, failure to be in
             good standing or otherwise has been received by Westcoast or its
             subsidiaries from any such regulatory authority.

         (g) There have been no improper withdrawals, applications or transfers
             of assets from any Westcoast Plan or the trusts or other funding
             media relating thereto that remain outstanding and unremedied, and
             neither Westcoast, nor any subsidiary of Westcoast, nor, to the
             knowledge of Westcoast, any of their respective agents has been in
             breach of any fiduciary obligation with respect to the
             administration of the Westcoast Plans or the trusts or other
             funding media relating thereto.

         (h) Westcoast or its subsidiaries may unilaterally amend or terminate,
             in whole or in part, each Westcoast Plan and take contribution
             holidays under or withdraw surplus from each Westcoast Plan,
             subject only to approvals required by Law and, with respect to
             amendment or termination, the collective agreements disclosed in
             Section 3.7 of the Westcoast Disclosure Letter.

         (i) No commitments to improve or otherwise amend any Westcoast Plan
             have been made except as required by applicable Laws.

         (j) None of the Westcoast Plans (other than pension plans) provide
             benefits to retired or former employees or to the beneficiaries or
             dependants of retired or former employees.

         (k) No insurance policy or any other contract or agreement affecting
             any Westcoast Plan requires or permits a retroactive increase in
             premiums or payments due thereunder.

         (l) All Westcoast Plans intended to be tax-qualified in the United
             States have been the subject of determination letters from the
             United States Internal Revenue Service to the effect that such
             Westcoast Plans and their related trusts are qualified and exempt
             from United States Federal income taxes under Sections 401(a) and
             501(a), respectively, of the Code, and no such determination letter
             has been revoked nor, to the knowledge of Westcoast, has revocation
             been threatened, nor has any such Westcoast Plan been amended since
             the date of its most recent determination letter or application
             therefor in any respect that would adversely affect its
             qualification or materially increase its costs and nothing has
             occurred since the date of such letter that could adversely affect
             the qualified status of such plan. As to any such Westcoast Plan,
             there has been no termination or partial termination of such
             Westcoast Plan within the meaning of Section 411(d)(3) of the Code.

         (m) No amount or benefit that could be received (whether in cash or
             property, the vesting of property or the acceleration of the
             exerciseability of stock options) as a result of or in connection
             with the transactions contemplated by this Agreement or the
             Arrangement (whether or not some other subsequent action or event
             would be required to cause the receipt of such amount or benefit to
             occur) by any employee,


                             COMBINATION AGREEMENT
                                       27
   32


             officer or director of Westcoast or any of its affiliates who is a
             "disqualified individual" (as such term is defined in proposed
             United States Treasury Regulation Section 1.280G-1) under any
             employment, severance or termination agreement, other compensation
             arrangement or Westcoast Plan currently in effect will fail to be
             deductible for United States federal income tax purposes by virtue
             of Section 280G of the Code.

         (n) None of the Westcoast Plans is a "multiemployer plan" within the
             meaning of Section 4001(a)(3) of ERISA or any other applicable Law,
             nor has Westcoast or any subsidiary of Westcoast been obligated to
             contribute to any such multiemployer plan at any time within the
             past six years.

         (o) No employment, severance or termination agreement, other
             compensation arrangement or Westcoast Plan provides for payment of
             a benefit, the increase of a benefit amount, the acceleration of
             contributions or funding, the payment of a contingent benefit or
             the acceleration of the payment or vesting of a benefit by reason
             of the execution of this Agreement or the consummation of the
             transactions contemplated by this Agreement or the Arrangement
             (whether or not some other subsequent action or event would be
             required to cause such payment, increase, acceleration, or vesting
             to be triggered).

         (p) As to any Westcoast Plan that is subject to Title IV of ERISA, no
             accumulated funding deficiency, whether or not waived, within the
             meaning of Section 302 of ERISA or Section 412 of the Code has been
             incurred, no reportable event within the meaning of Section 4043 of
             ERISA has occurred, no notice of intent to terminate the plan has
             been given under Section 4041 of ERISA, no proceeding has been
             instituted under Section 4042 of ERISA to terminate the plan, and
             no liability to the United States Pension Benefit Guaranty
             Corporation has been incurred.

         (q) As to any Westcoast Plan which is subject to ERISA or the Code, no
             act, omission or transaction has occurred which would result in
             imposition on Westcoast or any subsidiary of Westcoast of (i)
             breach of fiduciary duty liability damages under Section 409 of
             ERISA, (ii) a civil penalty assessed pursuant to subsections (c),
             (i) or (l) of Section 502 of ERISA, or (iii) a tax imposed pursuant
             to Chapter 43 of Subtitle D of the Code.

         (r) Each trust funding a Westcoast Plan, which trust is intended to be
             exempt from United States federal income taxation pursuant to
             Section 501(c)(9) of the Code, satisfies the requirements of such
             section and has received a favourable determination letter from the
             United States Internal Revenue Service regarding such exempt status
             and has not, since receipt of the most recent favourable
             determination letter, been amended or operated in a way which would
             adversely affect such exempt status.

3.14     AFFILIATES

         Section 3.14 of the Westcoast Disclosure Letter identifies all persons
who, to the knowledge of Westcoast, may be deemed to be affiliates of Westcoast
under Rule 145 of the 1933 Act, including all directors and executive officers
of Westcoast.


                             COMBINATION AGREEMENT
                                       28
   33


3.15     COMPLIANCE WITH LAWS; PERMITS

         (a) Westcoast, its subsidiaries and, to the knowledge of Westcoast, its
             Partially Owned Entities are in compliance, and at all times since
             January 1, 1998 have complied, with all applicable Laws other than
             non-compliance which would not, individually or in the aggregate,
             have a Material Adverse Effect on Westcoast. No investigation or
             review by any Governmental Entity with respect to Westcoast, any of
             its subsidiaries, or the knowledge of Westcoast, its Partially
             Owned Entities, is pending or, to the knowledge of Westcoast, is
             threatened, nor has any Governmental Entity indicated in writing an
             intention to conduct the same, other than those the outcome of
             which would not have a Material Adverse Effect on Westcoast.

         (b) Westcoast and its subsidiaries and, to the knowledge of Westcoast,
             its Partially Owned Entities are in possession of all franchises,
             grants, authorizations, licenses, permits, easements, variances,
             exemptions, consents, certificates, approvals and orders necessary
             to own, lease and operate their properties and to lawfully carry on
             their businesses as they are now being conducted (collectively, the
             "Westcoast Permits"), except where the failure to be in possession
             of such Westcoast Permits would not, individually or in the
             aggregate, have a Material Adverse Effect on Westcoast, and there
             is no action, proceeding or investigation pending or, to the
             knowledge of Westcoast, threatened regarding any of the Westcoast
             Permits which would have a Material Adverse Effect on Westcoast.
             None of Westcoast, any of its subsidiaries or, to the knowledge of
             Westcoast, any of its Partially Owned Entities is in conflict with,
             or in default or violation of any of the Westcoast Permits, except
             for any such conflicts, defaults or violations which would not,
             individually or in the aggregate, have a Material Adverse Effect on
             Westcoast.

         (c) None of Westcoast, any of its subsidiaries or, to the knowledge of
             Westcoast, any directors, officers, agents or employees of
             Westcoast or any of its subsidiaries has (i) used any funds for
             unlawful contributions, gifts, entertainment or other unlawful
             expenses relating to political activity, or (ii) made any unlawful
             payment to any government officials or employees or to political
             parties or campaigns or violated any provision of the United States
             Foreign Corrupt Practices Act of 1977, as amended in each case
             which could reasonably be expected to have a material and adverse
             effect on Westcoast.

3.16     RESTRICTIONS ON BUSINESS ACTIVITIES

         There is no agreement, judgment, injunction, order or decree binding
upon Westcoast or any of its subsidiaries that has or could be reasonably
expected to have the effect of prohibiting, restricting or materially impairing
any business practice of Westcoast or any of its subsidiaries, any acquisition
of property by Westcoast or any of its subsidiaries or the conduct of business
by Westcoast or any of its subsidiaries as currently conducted other than such
agreements, judgments, injunctions, orders or decrees which would not,
individually or in the aggregate, have a Material Adverse Effect on Westcoast.


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3.17     INTELLECTUAL PROPERTY

         (a) Westcoast and its subsidiaries, directly or indirectly, own,
             license or otherwise have legally enforceable rights to use, or can
             acquire on reasonable terms and without material expense, all
             patents, patent rights, trademarks, trade names, service marks,
             copyrights and any applications therefore, technology, know-how,
             computer software and applications and tangible or intangible
             proprietary information or materials, that are material to and used
             in the business of Westcoast and its subsidiaries as presently
             conducted (the "Intellectual Property Rights").

         (b) In the case of Intellectual Property Rights owned by Westcoast or
             one of its subsidiaries, either Westcoast or one of its
             subsidiaries owns such Intellectual Property Rights free and clear
             of any material liens, charges or encumbrances. Westcoast or one of
             its subsidiaries has an adequate right to the use of the
             Intellectual Property Rights or the material covered thereby in
             connection with the services or products in respect of which such
             Intellectual Property Rights are being used. Westcoast has not
             received any written notice or claim, nor has it received any other
             information, stating that the manufacture, sale, licensing, or use
             of any of the services or products of Westcoast or any of its
             subsidiaries as now manufactured, sold, licensed or used or
             proposed for manufacture, sale, licensing or use by Westcoast or
             any of its subsidiaries in the ordinary course of Westcoast's
             business as presently conducted infringes on any copyright, patent,
             trade mark, service mark or trade secret of a third party where
             such infringement would have a Material Adverse Effect on
             Westcoast. Westcoast has not received any written notice or claim,
             nor has it received any other information, stating that the use by
             Westcoast or any of its subsidiaries of any trademarks, service
             marks, trade names, trade secrets, copyrights, patents, technology
             or know-how and applications used in the business of Westcoast and
             any of its subsidiaries as presently conducted infringes on any
             other person's trademarks, service marks, trade names, trade
             secrets, copyrights, patents, technology or know-how and
             applications where such infringement would have a Material Adverse
             Effect on Westcoast. Westcoast has not received any written notice
             or claim, nor has it received any other information, challenging
             the ownership by Westcoast or any of its subsidiaries or the
             validity of any of the Intellectual Property Rights. All registered
             patents, trademarks, service marks and copyright held by Westcoast
             and its subsidiaries are subsisting, except to the extent any
             failure to be subsisting would not have a Material Adverse Effect
             on Westcoast. To the knowledge of Westcoast, there is no material
             unauthorized use, infringement or misappropriation of any of the
             Intellectual Property Rights by any third party, including any
             employee or former employee of Westcoast or any of its subsidiaries
             No Intellectual Property Right is subject to any known outstanding
             decree, order, judgment, or stipulation restricting in any manner
             the licensing thereof by Westcoast or any of its subsidiaries,
             except to the extent any such restriction would not have a Material
             Adverse Effect on Westcoast.


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3.18     INSURANCE

         Each of Westcoast and its subsidiaries is, and has been continuously
since September 1, 1996, insured by reputable and financially responsible
insurers in amounts and against risks and losses as are customary for companies
conducting their respective businesses. Westcoast's and its subsidiaries'
insurance policies are in all material respects in full force and effect in
accordance with their terms, no notice of cancellation or termination has been
received, and there is no existing default or event which, with the giving of
notice or lapse of time or both would constitute a default thereunder.

3.19     PROPERTY

         (a) Westcoast, its subsidiaries and, to the knowledge of Westcoast, its
             Partially Owned Entities have defensible title (or, with respect to
             pipelines, equipment and other tangible personal property used in
             connection with Westcoast's pipeline operations (collectively,
             "Westcoast Pipeline Assets") title to or interest in the applicable
             Westcoast Pipeline Assets sufficient to enable Westcoast, its
             subsidiaries and, to the knowledge of Westcoast, its Partially
             Owned Entities to conduct their businesses with respect thereto
             without material interference as it is currently being conducted)
             to all their material properties and assets, whether tangible or
             intangible, real, personal or mixed, free and clear of all liens,
             except for liens disclosed in the Westcoast Documents and liens the
             existence of which would not have a Material Adverse Effect on
             Westcoast.

         (b) The businesses of Westcoast and each of its subsidiaries have been
             and are being operated in a manner which does not violate (in any
             manner which would, or which would be reasonably expected to, have
             a Material Adverse Effect on Westcoast) the terms of any easements,
             rights of way, permits, servitudes, licenses, leasehold estates and
             similar rights relating to real property (collectively,
             "Easements") used by Westcoast and each of its subsidiaries in such
             businesses. All Easements are valid and enforceable, except as the
             enforceability thereof may be affected by bankruptcy, insolvency or
             other Laws of general applicability affecting the rights of
             creditors generally or principles of equity, and grant the rights
             purported to be granted thereby and all rights necessary thereunder
             for the current operation of such businesses where the failure of
             any such Easement to be valid and enforceable or to grant the
             rights purported to be granted thereby or necessary thereunder
             would have a Material Adverse Effect on Westcoast. There are no
             special gaps in the Easements which would impair the conduct of
             such businesses in a manner that would, or that would be reasonably
             expected to, have a Material Adverse Effect on Westcoast, and no
             part of the Westcoast Pipeline Assets is located on property which
             is not owned in fee by Westcoast or a subsidiary of Westcoast or
             subject to an Easement in favour of Westcoast or a subsidiary of
             Westcoast, where the failure of such Westcoast Pipeline Assets to
             be so located would have a Material Adverse Effect on Westcoast.


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3.20     REGULATORY PROCEEDINGS

         None of Westcoast, any of its subsidiaries or, to the knowledge of
Westcoast, any of its Partially Owned Entities, all or part of whose rates or
services are regulated by a Governmental Entity, is a party to any proceeding
before a Governmental Entity which is reasonably likely to result in orders
having a material burden on the future operations or business of Westcoast or
any Material Subsidiary of Westcoast nor has written notice of any such
proceeding been received by Westcoast, any of its subsidiaries or, to the
knowledge of Westcoast, any of its Partially Owned Entities.

3.21     REGULATION AS A UTILITY

         (a) Westcoast and all of its "subsidiary companies" and "affiliates",
             as such terms are defined in the 1935 Act, either are not subject
             to or are exempt from all provisions of the 1935 Act other than
             Section 9(a)(2) of the 1935 Act.

         (b) None of Westcoast or any of its "subsidiary companies" or
             "affiliates" is subject to regulation as a "holding company" or a
             "subsidiary company" or "affiliate" of a "holding company", as such
             terms are defined in the 1935 Act.

3.22     FUTURES TRADING AND FIXED PRICE EXPOSURE

         The Board of Directors of Westcoast has approved the formation and
mandate of the Corporate Risk Management Committee (the "CRMC"). The CRMC is
responsible for providing the overall direction on all aspects of Westcoast's
business risk management. Such responsibilities include approval and oversight
of the aggregate risk limits and the delegation of risk management authority and
accountability to the business units and functional units. The business risk
management programs of Westcoast and its subsidiaries are consistent with the
policies of the CRMC.

         The Board of Directors of Westcoast has established risk parameters to
restrict the level of risk that Engage Energy Canada, Inc. ("Engage") and its
subsidiaries are authorized to take with respect to the net position of Engage
and its subsidiaries resulting from all physical commodity transactions,
exchange traded futures and options and over-the-counter derivative instruments
(the "Net Engage Position") and the CRMC monitors the compliance by Engage and
its subsidiaries with such risk parameters. The risk parameters established by
the Board of Directors of Westcoast as of the date hereof are set forth in
Section 3.22 of the Westcoast Disclosure Letter and may be modified only by the
Board of Directors of Westcoast. The Net Engage Position is within the risk
parameters which have been established by Westcoast's Board of Directors or
otherwise approved by Westcoast's Board of Directors.

         In the case of Westcoast's regulated subsidiaries, risk management
programs have been established which govern the actions and conduct of such
subsidiaries with respect to their management of gas supply portfolio risk
arising from the use of physical commodity transactions, exchange traded futures
and options and over-the-counter derivative instruments. The actions of each
regulated subsidiary are reviewed by each of such subsidiary's respective
regulatory bodies. Such subsidiaries are in compliance with their stated
programs or policies.


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                                       32
   37


3.23     OPINION OF FINANCIAL ADVISORS

         The Board of Directors of Westcoast has received the opinions of Credit
Suisse First Boston Corporation and CIBC World Markets Inc., Westcoast's
financial advisors, to the effect that, as of the date hereof, the consideration
to be received by the holders of Westcoast Common Shares pursuant to the
transactions contemplated hereby is fair to the holders of Westcoast Common
Shares from a financial point of view and those opinions have not been
withdrawn, reserved or modified in any material respect.

3.24     BROKERAGE AND FINDERS' FEES

         Except for Westcoast's obligations to Credit Suisse First Boston
Corporation and CIBC World Markets Inc., neither Westcoast nor any subsidiary of
Westcoast or any shareholder, director, officer or employee thereof, has
incurred or will incur on behalf of Westcoast, any brokerage, finders' or
similar fee in connection with the transactions contemplated hereby. Copies of
all written agreements relating to Westcoast's obligations to Credit Suisse
First Boston Corporation and CIBC World Markets Inc. have previously been
provided to Duke Energy and all other agreements relating to such obligations
are described in Section 3.24 of the Westcoast Disclosure Letter.

3.25     WESTCOAST RIGHTS PLAN

         None of the execution or the delivery of this Agreement or the taking
of any action contemplated by this Agreement results, or will result, in Duke
Energy becoming an Acquiring Person (as defined in the Westcoast Rights Plan),
provided that, prior to the consummation of the Arrangement, the Westcoast
Rights Plan Waiver Resolution is approved by the affirmative vote of a majority
of the votes cast by holders of Westcoast Common Shares.

3.26     SOLVENCY OF WESTCOAST

         Westcoast is not insolvent, and at the time of the consummation of the
Arrangement will not be insolvent, as defined in Section 192(2) of the CBCA.

                                    ARTICLE 4

            REPRESENTATIONS AND WARRANTIES OF THE DUKE ENERGY PARTIES

         The Duke Energy Parties represent and warrant to Westcoast as follows
in each case except as set forth in the Duke Energy Disclosure Letter (each of
which exceptions shall specifically identify the relevant section hereof to
which it relates):

4.1      ORGANIZATION AND STANDING

         (a) Each of the Duke Energy Parties has been duly organized or formed
             and is validly existing under the Laws of its jurisdiction of
             organization or formation with full corporate or legal power and
             authority to own, lease and operate its properties and to conduct
             its businesses as currently owned and conducted except where,
             individually or in the aggregate, the failure of a subsidiary other
             than a Material Subsidiary to be


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             so organized, formed or existing or to have such power or authority
             would not have a Material Adverse Effect on Duke Energy. Each of
             the Duke Energy Parties is duly qualified to do business in each
             jurisdiction in which the nature of the business conducted by it or
             the ownership or leasing of its properties requires it to so
             qualify, except where the failure to be so qualified would not have
             a Material Adverse Effect on Duke Energy.

         (b) Duke Energy has heretofore made available to Westcoast complete and
             correct copies of its governing documents as well as the governing
             documents of Exchangeco, in each case as in effect on the date
             hereof.

4.2      CAPITALIZATION

         (a) The authorized capital stock of Duke Energy consists of 12.5
             million shares of Preferred Stock, 10.0 million shares of Preferred
             Stock A, 1.5 million shares of Preference Stock and 2.0 billion
             Duke Energy Common Shares and there were 2,284,984 shares of
             Preferred Stock, 2,057,185 shares of Preferred Stock A and no
             Preference Stock issued and outstanding and 775,386,163 Duke Energy
             Common Shares issued and outstanding as of September 6, 2001. As of
             September 6, 2001 there were 55,276,119 Duke Energy Common Shares
             reserved, in the aggregate, for issuance in respect of the Duke
             Energy Stock Plans. As of August 31, 2001, there were outstanding
             options permitting the holders thereof to purchase 20,166,929 Duke
             Energy Common Shares in the aggregate.

         (b) All of the outstanding shares of capital stock of the Duke Energy
             Parties have been duly authorized and are validly issued and fully
             paid and non-assessable, were not issued in violation of
             pre-emptive or similar rights or any other agreement or
             understanding binding upon the Duke Energy Parties and were issued
             in compliance with all applicable securities Laws and the governing
             documents of the Duke Energy Parties except where, individually or
             in the aggregate, the failure of the shares or ownership interest
             in a subsidiary other than a Material Subsidiary to be so
             authorized or issued would not have a Material Adverse Effect on
             Duke Energy. The authorized capital stock of Exchangeco consists of
             an unlimited number of common shares and an unlimited number of
             preference shares. As of the date hereof, all of the outstanding
             capital stock of Exchangeco is owned by N.S. U.L.C. and all of the
             outstanding capital stock of N.S. U.L.C. is owned indirectly by
             Duke Energy.

         (c) Except as described in Section 4.2(a) above, there are no
             outstanding options, warrants, subscriptions, puts, calls or other
             rights, agreements, arrangements or commitments (pre-emptive,
             contingent or otherwise) obligating Duke Energy to offer, issue,
             sell, redeem, repurchase, otherwise acquire or transfer, pledge or
             encumber any capital stock of Duke Energy nor are there outstanding
             any securities or obligations of any kind convertible into or
             exercisable or exchangeable for any capital stock of Duke Energy
             and Duke Energy has no obligation of any kind to issue any
             additional securities or to pay for or repurchase any securities.
             There are not outstanding as of the date hereof any stock
             appreciation rights, phantom equity or similar rights, agreements,
             arrangements or commitments based upon the book value, income or
             any


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                                       34
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             other attribute of Duke Energy or any of its subsidiaries. There
             are no outstanding bonds, debentures or other evidences of
             indebtedness of Duke Energy or any of its subsidiaries having the
             right to vote (or that are exchangeable or convertible for or
             exercisable into securities having the right to vote) with the
             holders of the Duke Energy Common Shares on any matter as of the
             date hereof.

4.3      AUTHORITY AND NO CONFLICTS

         (a) Each of the Duke Energy Parties has all requisite corporate power
             and authority to enter into this Agreement and to perform its
             obligations hereunder and to consummate the transactions
             contemplated hereby. The execution and delivery of this Agreement
             by the Duke Energy Parties and the consummation by the Duke Energy
             Parties of the transactions contemplated by this Agreement have
             been duly and validly authorized by all requisite corporate action
             and no other corporate proceedings on the part of the Duke Energy
             Parties are necessary to authorize this Agreement or to consummate
             the transactions contemplated hereby.

         (b) This Agreement has been duly executed and delivered by the Duke
             Energy Parties and constitutes a legal, valid and binding
             obligation of each of the Duke Energy Parties, enforceable against
             each of them in accordance with its terms, except as the same may
             be limited by bankruptcy, insolvency and other applicable Laws
             affecting creditors' rights generally, and by general principles of
             equity.

         (c) The Board of Directors of Duke Energy at a meeting duly called and
             held has determined by the unanimous approval of all directors
             voting that this Agreement and the transactions contemplated hereby
             are in the best interests of Duke Energy and the holders of Duke
             Energy Common Shares.

         (d) Neither the execution and delivery of this Agreement by the Duke
             Energy Parties nor the performance by each of them of their
             obligations hereunder and the completion of the transactions
             contemplated hereby, will:

             (i)   conflict with, or violate any provision of, the governing
                   documents of any of the Duke Energy Parties;

             (ii)  subject to the consents, approvals, orders, authorizations,
                   registrations, declarations or filings referred to in Section
                   4.4 being made or obtained, violate or breach any Laws
                   applicable to Duke Energy or any of its subsidiaries;

             (iii) subject to the consents, approvals, orders, authorizations,
                   registrations, declarations or filings referred to in Section
                   4.4 being made or obtained, violate or conflict with or
                   result in the breach of, or constitute a default (or an event
                   that with the giving of notice, the passage of time, or both
                   would constitute a default) under, or entitle any party (with
                   the giving of notice, the passage of time or both) to
                   terminate, accelerate, modify or call any obligations or
                   rights under any credit agreement, note, bond, mortgage,
                   indenture, deed of trust, contract, agreement, lease,
                   license, franchise, permit,


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                   concession, easement or other instrument to which Duke Energy
                   or any of its subsidiaries is a party or by which Duke Energy
                   or any of its subsidiaries or its or their property is bound
                   or subject; or

             (iv)  result in the imposition of any encumbrance, charge or lien
                   upon any of Duke Energy's assets or the assets of any of its
                   subsidiaries, or restrict, hinder, impair or limit the
                   ability of Duke Energy or any of its subsidiaries to carry on
                   the business of Duke Energy or any of its subsidiaries as and
                   where it is now being carried on;

         except in the case of clauses (ii) through (iv) for any of the
         foregoing that would not, individually or in the aggregate, have a
         Material Adverse Effect on Duke Energy or materially impair the ability
         of Duke Energy to perform its obligations hereunder or prevent or
         materially delay the consummation of any of the transactions
         contemplated hereby.

4.4      CONSENTS; APPROVALS

         No consent, approval, order or authorization of, or registration,
declaration or filing with, any third party or Governmental Entity is required
by or with respect to any of the Duke Energy Parties in connection with the
execution and delivery of this Agreement by the Duke Energy Parties, the
performance of their obligations hereunder or the consummation by Duke Energy of
the transactions contemplated hereby other than (a) any approvals required by
the Interim Order, (b) the Final Order, (c) such registrations and other actions
required under federal, state, provincial and territorial securities Laws as are
contemplated by this Agreement, (d) any filings with the Director under the
CBCA, (e) the Appropriate Regulatory Approvals relating to the Duke Energy
Parties, (f) the consents or approvals set forth in Section 4.4 of the Duke
Energy Disclosure Letter and (g) any other consents, approvals, orders,
authorizations, registrations, declarations or filings which, if not obtained or
made, would not, individually or in the aggregate, have a Material Adverse
Effect on Duke Energy or prevent or materially delay the consummation of any of
the transactions contemplated hereby or materially impair Duke Energy's ability
to perform its obligations hereunder.

4.5      NO DEFAULTS

         None of Duke Energy, any of its Material Subsidiaries or, to the
knowledge of Duke Energy, any other party thereto, is in default under or
violation of, and there has been no event, condition or occurrence which, after
notice or lapse of time or both, would constitute such a default or violation
of, any term, condition or provision of, or permit the termination of, (a) their
respective governing documents, (b) any credit agreement, note, bond, mortgage,
indenture, contract, agreement, lease, license, franchise, permit, concession,
easement or other instrument to which Duke Energy or any of its subsidiaries is
a party or by which Duke Energy or any of its subsidiaries or any of its or
their property is bound or subject, except, in the case of clause (b), defaults
and violations which, individually or in the aggregate, would not have a
Material Adverse Effect on Duke Energy.


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4.6      ABSENCE OF CERTAIN CHANGES OR EVENTS

         Except as disclosed in the Duke Energy SEC Documents filed prior to the
date hereof, since December 31, 2000, there has been no Material Adverse Effect
with respect to Duke Energy or any event, occurrence or development which would
be reasonably expected to have a Material Adverse Effect on Duke Energy or which
materially and adversely affects the ability of Duke Energy to consummate the
transactions contemplated hereby.

4.7      REPORTS; FINANCIAL STATEMENTS

         (a) Since January 1, 1998 Duke Energy and its subsidiaries have timely
             filed all forms, reports, schedules, statements and other documents
             required to be filed with (i) the SEC under the Exchange Act or the
             1933 Act (the "Duke Energy SEC Documents"), (ii) any applicable
             state securities authority and (iii) any other Governmental Entity,
             except in each case where the failure to file any such forms,
             reports, schedules, statements or other documents would not have a
             Material Adverse Effect on Duke Energy (all such forms, reports,
             schedules, statements and other documents are collectively referred
             to as the "Duke Energy Documents"). The Duke Energy SEC Documents,
             at the time filed (x) did not contain any untrue statement of a
             material fact or omit to state a material fact required to be
             stated therein or necessary in order to make the statements
             contained therein not misleading in light of the circumstances
             under which they were made and (y) complied in all material
             respects with the requirements of applicable Laws (including the
             1933 Act, the Exchange Act and the rules and regulations
             thereunder).

         (b) The consolidated financial statements (including in each case, any
             related notes thereto) contained in any Duke Energy SEC Documents
             (i) have been prepared in accordance with United States generally
             accepted accounting principles applied on a consistent basis during
             the periods involved (subject, in the case of unaudited financial
             statements, to the absence of notes), (ii) complied in all material
             respects with the requirements of applicable securities Laws, and
             (iii) fairly present, in all material respects, the consolidated
             financial position, results of operations and cash flows of Duke
             Energy and its subsidiaries as of the respective dates thereof and
             for the respective periods covered thereby, subject, in the case of
             unaudited financial statements, to normal, recurring audit
             adjustments none of which will be material.

         (c) From January 1, 1998 to the date of this Agreement, there has been
             no change in Duke Energy's accounting policies or methods of making
             accounting estimates or changes in estimates that are material to
             such financial statements, except as described in the notes thereto
             with respect to periods ending prior to the date hereof.

4.8      LITIGATION

         There are no claims, actions, proceedings or investigations pending or,
to the knowledge of Duke Energy, threatened against Duke Energy or any of its
subsidiaries before any Governmental Entity (and Duke Energy and its
subsidiaries have no knowledge of any facts that are likely to give rise to any
such claim, action, proceeding or investigation) that would be


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reasonably expected to have a Material Adverse Effect on Duke Energy, or prevent
or materially delay consummation of the transactions contemplated by this
Agreement. Neither Duke Energy nor any of its subsidiaries, nor their respective
assets and properties, is subject to any outstanding judgment, order, writ,
injunction or decree that has had or would be reasonably expected to have a
Material Adverse Effect on Duke Energy or that would prevent or materially delay
consummation of the transactions contemplated by this Agreement.

4.9      ENVIRONMENTAL

         Except for any matters which individually or in the aggregate are not
reasonably likely to result in a Material Adverse Effect on Duke Energy:

         (a) all operations of Duke Energy and its subsidiaries have been
             conducted, and are now, in compliance with all Environmental Laws;

         (b) Duke Energy and its subsidiaries are in possession of, and in
             compliance with, all permits, authorizations, certificates,
             registrations, approvals and consents necessary under Environmental
             Laws to own, lease and operate their properties and to conduct
             their respective businesses as they are now being conducted or as
             proposed to be conducted (collectively the "Duke Energy
             Environmental Permits"); and

         (c) neither Duke Energy nor any of its subsidiaries is subject to:

             (i)   any Environmental Laws that require any work, repairs,
                   construction, change in business practices or operations, or
                   expenditures, including capital expenditures for facility
                   upgrades, environmental investigation and remediation
                   expenditures, or any other such expenditures;

             (ii)  any written demand or written notice alleging the breach of
                   or with respect to liability under any Environmental Laws
                   applicable to Duke Energy or any subsidiary of Duke Energy,
                   including any regulations respecting the use, storage,
                   treatment, transportation or disposition (including disposal
                   or arranging for disposal) of Hazardous Substances;

             (iii) any written demand or written notice with respect to
                   liability, by contract or operation of Environmental Laws
                   applicable to Duke Energy or any current or former subsidiary
                   of Duke Energy or any of their respective predecessor
                   entities, divisions or any formerly owned, leased or operated
                   properties or assets of the foregoing, including liability
                   with respect to the presence, release, threatened release or
                   discharge of Hazardous Substances; or

             (iv)  any changes in the terms or conditions of any Duke Energy
                   Environmental Permits or any renewal (other than renewals in
                   the ordinary course on the expiry of permits), modification,
                   revocation, reissuance, alteration or amendment of such Duke
                   Energy Environmental Permits that are required in connection
                   with the execution or delivery of this Agreement, the
                   consummation of the transactions contemplated hereby or the
                   continuation of


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                   business of Duke Energy or any subsidiaries of Duke Energy
                   following such consummation.

4.10     NUCLEAR OPERATIONS

         To the knowledge of Duke Energy, the operations of its Nuclear Steam
Generating Stations ("Nuclear Stations") are and have at all times been
conducted in material compliance with applicable health, safety, regulatory and
other legal requirements. To the knowledge of Duke Energy, the Nuclear Stations
maintain emergency plans designed to respond to an unplanned release therefrom
of radioactive materials into the environment, liability insurance to the extent
required by Law, and such further insurance (other than liability insurance) as
is consistent with Duke Energy's view of the risks inherent in the operation of
a nuclear power facility. To the knowledge of Duke Energy, plans for the
decommissioning of each of the Nuclear Stations and for the short-term storage
of spent nuclear fuel conform in all material respects with applicable
regulatory or other legal requirements, and such plans have at all times since
January 1, 1998 been funded to the extent required by Law (which funded amount
is not materially inconsistent, in the aggregate, with Duke Energy's budget
projections for the amount required to be spent under such plans) except for any
lack of funding which would not have a Material Adverse Effect on Duke Energy.

4.11     COMPLIANCE WITH LAWS; PERMITS

         (a) Duke Energy and its subsidiaries are in compliance, and at all
             times since January 1, 1998 have complied, with all applicable Laws
             other than non-compliance which would not, individually or in the
             aggregate, have a Material Adverse Effect on Duke Energy. No
             investigation or review by any Governmental Entity with respect to
             Duke Energy or any of its subsidiaries is pending or, to the
             knowledge of Duke Energy, is threatened, nor has any Governmental
             Entity indicated in writing an intention to conduct the same, other
             than those the outcome of which would not have a Material Adverse
             Effect on Duke Energy.

         (b) Duke Energy and its subsidiaries are in possession of all
             franchises, grants, authorizations, licenses, permits, easements,
             variances, exemptions, consents, certificates, approvals and orders
             necessary to own, lease and operate their properties and to
             lawfully carry on their businesses as they are now being conducted
             (collectively, the "Duke Energy Permits"), except where the failure
             to be in possession of such Duke Energy Permits would not,
             individually or in the aggregate, have a Material Adverse Effect on
             Duke Energy, and there is no action, proceeding or investigation
             pending or, to the knowledge of Duke Energy, threatened regarding
             any of the Duke Energy Permits which would have a Material Adverse
             Effect on Duke Energy. Neither Duke Energy nor any of its
             subsidiaries is in conflict with, or in default or violation of any
             of the Duke Energy Permits, except for any such conflicts, defaults
             or violations which, individually or in the aggregate, would not
             have a Material Adverse Effect on Duke Energy.

         (c) None of Duke Energy, any of its subsidiaries or, to the knowledge
             of Duke Energy, any directors, officers, agents or employees of
             Duke Energy or any of its subsidiaries


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             has (i) used any funds for unlawful contributions, gifts,
             entertainment or other unlawful expenses relating to political
             activity, or (ii) made any unlawful payment to any government
             officials or employees or to political parties or campaigns or
             violated any provision of the United States Foreign Corrupt
             Practices Act of 1977, as amended in each case which could
             reasonably be expected to have a material and adverse effect on
             Duke Energy.

4.12     REGULATORY PROCEEDINGS

         Neither Duke Energy nor any of its subsidiaries, all or part of whose
rates or services are regulated by a Governmental Entity, is a party to any
proceeding before a Governmental Entity which is reasonably likely to result in
orders having a material burden on the future operations or business of any
Material Subsidiary of Duke Energy nor has written notice of any such proceeding
been received by Duke Energy or any of its subsidiaries.

4.13     FUTURES TRADING AND FIXED PRICE EXPOSURE

         The Market Risk Committee of Duke Energy has established risk
parameters to restrict the level of risk that Duke Energy and its subsidiaries
are authorized to take with respect to the open position resulting from all
physical commodity transactions, exchange traded futures and options and
over-the-counter derivative instruments (the "Open Duke Energy Position") and
monitors the compliance by Duke Energy and its subsidiaries with such risk
parameters. The risk parameters established by the Market Risk Committee of Duke
Energy may be modified only by the Market Risk Committee of Duke Energy. The
Open Duke Energy Position is within the risk parameters which have been
established by the Market Risk Committee of Duke Energy.

4.14     BROKERAGE AND FINDERS' FEES

         Neither Duke Energy nor any of its shareholders, directors, officers or
employees has incurred or will incur on behalf of Duke Energy, any brokerage,
finders' or similar fee in connection with the transactions contemplated hereby,
except that Duke Energy has employed Merrill Lynch & Co. as its financial
advisor pursuant to a written agreement.

                                    ARTICLE 5

                            COVENANTS AND AGREEMENTS

5.1      COVENANTS OF WESTCOAST

         (a) Westcoast agrees as follows until the Effective Date or the earlier
             termination of this Agreement in accordance with Article 7, in each
             case except (x) with the consent of Duke Energy to any deviation
             therefrom, (y) with respect to any matters which are disclosed in
             Section 5.1 of the Westcoast Disclosure Letter (each of which
             exceptions shall specifically identify the relevant subsection
             hereof to which it relates) or (z) as expressly contemplated by
             this Agreement or the Plan of Arrangement:

             (i)   Each of Westcoast and its subsidiaries shall (A) carry on its
                   businesses in the usual and ordinary course consistent with
                   past practices, (B) use reasonable best efforts to preserve
                   intact its present business organizations and material


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                   rights and franchises, to keep available the services of its
                   current officers and employees, and to preserve its
                   relationships with customers, suppliers and others having
                   business dealings with it, (C) maintain and keep its material
                   properties and assets in as good repair and condition as at
                   the date hereof, subject to ordinary wear and tear, and (D)
                   with respect to wholesale power and energy trading
                   transactions, comply with the risk parameters approved by
                   Westcoast's Board of Directors or, in the case of regulated
                   entities, contained in their program or guidelines and in
                   effect on the date hereof, all to the end that its goodwill
                   and ongoing businesses shall not be impaired in any material
                   respect at the Effective Time.

             (ii)  Westcoast shall not, and it shall not permit any of its
                   subsidiaries to: (A) declare or pay any dividends on, make
                   other distributions or return capital in respect of any of
                   its capital stock or any other equity interests, except for
                   regular quarterly cash dividends on Westcoast Common Shares
                   of Cdn$ 0.34 per share with record and payment dates
                   consistent with past practice, dividends required by the
                   terms of any securities outstanding on the date hereof,
                   dividends, distributions or return of capital payable by a
                   subsidiary to Westcoast or a wholly-owned subsidiary of
                   Westcoast other than an Excluded Asset; (B) split, combine or
                   reclassify any of its capital stock or issue or authorize or
                   propose the issuance of any other securities in respect of,
                   in lieu of or in substitution for, shares of its capital
                   stock; (C) issue, sell, pledge, reserve, set aside, dispose
                   of or encumber, repurchase, redeem or otherwise acquire, any
                   shares of its capital stock or any securities or obligations
                   convertible into, exerciseable or exchangeable for, or any
                   rights, warrants, calls, subscriptions or options to acquire,
                   shares of its capital stock, except (1) pursuant to the terms
                   of the Westcoast Dividend Reinvestment Plan, as in effect on
                   the date hereof, (2) as required by the terms of any
                   securities outstanding on the date hereof, (3) pursuant to
                   fully vested Westcoast Options granted prior to the date
                   hereof, (4) the redemption of the Westcoast First Preferred
                   Shares in accordance with this Agreement, or (5) options
                   granted in the ordinary course of business consistent with
                   past practice under the Westcoast Stock Option Plans; or (D)
                   enter into or announce any agreement or arrangement with
                   respect to the sale, voting, registration or repurchase of
                   any shares of its capital stock or any security convertible
                   into or exchangeable for such shares.

             (iii) Except for capital expenditures (A) included in the 2001
                   capital expenditures budget that was previously approved by
                   the Board of Directors of Westcoast (including any that are
                   not expended until 2002) or in the Second Quarter 2001
                   Outlook previously provided to the Board of Directors of
                   Westcoast, each of which was previously provided to Duke
                   Energy, (B) for a business unit that are provided for in, and
                   do not exceed the lesser of $15 million more than, or 150%
                   of, the amount set forth for such business unit in the
                   forecast 2002 capital expenditure schedule to the Westcoast
                   Five Year Financial Forecast 2001-2005 which was previously
                   provided to the Board of Directors of Westcoast and to Duke
                   Energy and which expenditures are as otherwise contemplated
                   in such forecast; provided,


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                   that the aggregate capital expenditures permitted hereunder
                   do not exceed 110% of the capital expenditures provided for
                   Westcoast on a consolidated basis in such forecast and
                   provided further that this covenant shall not apply to
                   capital expenditures related to Maritimes & Northeast
                   Pipeline or P.T. Puncakjaya Power, or (C) that are required
                   under applicable Law, Westcoast shall not, nor shall
                   Westcoast permit any of its subsidiaries to, make or commit
                   to make any capital expenditures (including capital lease
                   obligations) in excess of $10 million individually or in the
                   aggregate other than capital expenditures to repair or
                   replace facilities destroyed or damaged due to casualty or
                   accident (whether or not covered by insurance).

             (iv)  Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, reorganize, recapitalize, consolidate,
                   dissolve, liquidate, amalgamate or merge with any other
                   person, nor acquire or agree to acquire, by amalgamating,
                   merging or consolidating with, by purchasing an equity
                   interest in or a portion of the assets of, or by any other
                   manner, any business or person or otherwise acquire or agree
                   to acquire any assets of any other person as to which the
                   total consideration is in excess of $10 million individually
                   (or in respect of a series of related transactions) or $50
                   million in the aggregate (other than purchases of assets from
                   suppliers or vendors in the ordinary course of business
                   consistent with past practice). Westcoast may not acquire any
                   electric utility assets or any retail gas assets or
                   properties unless Westcoast consults with Duke Energy prior
                   thereto and such acquisition will not, in the opinion of Duke
                   Energy, violate Section 5.1(a)(xiii).

             (v)   Except with respect to the sale of assets of Westcoast or any
                   subsidiary of Westcoast as to which the aggregate market
                   value is not in excess of $10 million individually (or in
                   respect of a series of related transactions) or $50 million
                   in the aggregate and except for the sale of gas and other
                   energy products in the ordinary course of business consistent
                   with past practice, Westcoast shall not, nor shall it permit
                   any of its subsidiaries to sell, pledge, encumber, lease
                   (whether such lease is an operating or capital lease) or
                   otherwise dispose of any assets (other than relating to
                   transactions between two or more wholly-owned Westcoast
                   subsidiaries or between a wholly-owned subsidiary and
                   Westcoast).

             (vi)  Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, (A) incur any indebtedness for borrowed
                   money or purchase money indebtedness or assume, guarantee,
                   endorse or enter into a "keepwell" or similar arrangement
                   with respect to, any indebtedness, other than (1)
                   indebtedness between Westcoast or any of its subsidiaries and
                   another of its subsidiaries, (2) additional indebtedness
                   incurred in the ordinary course of business consistent with
                   past practice in an amount not to exceed $50 million in the
                   aggregate and (3) additional borrowings under credit lines
                   existing as of the date hereof incurred in the ordinary
                   course of business consistent with past practice, (B) enter
                   into interest rate swaps with a notional amount in excess of
                   $75 million in the aggregate, or (C) enter into any material
                   operating lease or create any mortgages, liens, security
                   interests or other encumbrances on the


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                   property of Westcoast or any of its subsidiaries in
                   connection with any indebtedness.

            (vii)  Except as required by applicable Law or any agreement to
                   which Westcoast or any of its subsidiaries is a party on the
                   date hereof, Westcoast shall not, nor shall it permit any of
                   its subsidiaries to:

                   (A) increase the amount of (or accelerate the payment or
                       vesting of) any benefit or amount payable under, any
                       employee benefit plan or any other contract, agreement,
                       commitment, arrangement, plan or policy providing for
                       compensation or benefits to any former, present or future
                       director, officer or employee of Westcoast or any of its
                       subsidiaries;

                   (B) increase (or enter into any commitment or arrangement to
                       increase) the compensation or benefits, or otherwise to
                       extend, expand or enhance the engagement, employment or
                       any related rights, of any former, present or future
                       director, officer, employee or consultant of Westcoast or
                       any of its subsidiaries, except for normal increases for
                       persons who are not directors or officers made in the
                       ordinary course of business consistent with past
                       practice, provided that the overall compensation budget
                       shall not increase by more than 3.5% on an annual basis;

                   (C) whether through its Board of Directors or otherwise,
                       accelerate the vesting of any unvested Westcoast Options
                       or accelerate the release of, or the expiry date of any
                       hold period relating to, any Westcoast Common Shares held
                       in the Westcoast Employee Share Purchase Plans, or
                       otherwise amend, vary or modify such plans or the
                       Westcoast Stock Option Plans; or

                   (D) adopt, establish, enter into or implement any employee
                       benefit plan, policy, severance or termination agreement
                       providing for any form of benefits or other compensation
                       to any former, present or future director, officer or
                       employee of Westcoast or any of its subsidiaries or amend
                       any employee benefit plan, policy, severance or
                       termination agreement.

            (viii) Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, amend or propose to amend its governing
                   documents.

            (ix)   Subject to applicable Law, Westcoast shall not implement any
                   changes in its or any of its regulated subsidiaries' rates or
                   charges (other than pass-through or tracking rate charges
                   under existing tariffs or rate schedules), standards of
                   service or accounting or execute any agreement with respect
                   thereto that is otherwise permitted under this Agreement (a
                   "Rate Change") that could be reasonably expected to
                   materially decrease the revenues of the business unit
                   implementing such change. Westcoast shall, and shall cause
                   its subsidiaries to, deliver to Duke Energy a copy of each
                   filing or agreement relating to a Rate Change at least five
                   days prior to the filing or execution thereof.


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                   Westcoast shall, and shall cause its subsidiaries to, make
                   all such filings only in the ordinary course of business
                   consistent with past practice.

            (x)    Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, pay, discharge, satisfy, compromise or
                   settle any claims or liabilities prior to the same being due
                   which, individually or in the aggregate, are in excess of $25
                   million.

            (xi)   Except as required by applicable Laws, Westcoast shall not,
                   nor shall it permit any of its subsidiaries to, enter into,
                   terminate or waive any provision of, exercise any option or
                   relinquish any contractual rights under, or modify in any
                   material respect any contract, agreement, guarantee, lease
                   commitment or arrangement of the nature required to be
                   disclosed by Section 3.9 or any contract which involves
                   payments or receipts by Westcoast or any of its subsidiaries
                   of more than $25 million over the term of such contract or
                   agreement.

            (xii)  Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, make any changes to the existing accounting
                   practices, methods and principles relating to Westcoast or
                   any subsidiary of Westcoast except as required by Law or by
                   Canadian generally accepted accounting principles as advised
                   by Westcoast's or such subsidiary's regular independent
                   accountants, as the case may be.

            (xiii) Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, engage in any activities which would cause a
                   change in its status, or that of its subsidiaries, under the
                   1935 Act, or that would impair the ability of Duke Energy to
                   continue to claim an exemption as of right under Rule 2 of
                   the 1935 Act following the Arrangement.

            (xiv)  Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, make or rescind any material tax election.

            (xv)   Westcoast shall not take any action to exempt from, waive or
                   make not subject to (including redemption of outstanding
                   rights) (A) the Westcoast Rights Plan or (B) any takeover Law
                   or other Law that purports to limit or restrict business
                   combinations or the ability to acquire or vote shares, any
                   person (other than Duke Energy and its subsidiaries) or any
                   action taken thereby, including any Take-over Bid (as defined
                   in the Westcoast Rights Plan), which person or action would
                   have otherwise been subject to the restrictive provisions
                   thereof and not exempt therefrom. Westcoast shall not nor
                   shall it permit any subsidiary to, (a) enter into any
                   confidentiality or standstill agreement except as permitted
                   by Section 5.5(a), (b) amend, release any third party from
                   its obligations or grant any consent under any
                   confidentiality or standstill provision or fail to fully
                   enforce any such provision.

            (xvi)  Westcoast shall not, nor shall it permit any of its
                   subsidiaries to, take or fail to take any action which would
                   cause any of Westcoast's representations or


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   49


                   warranties hereunder to be untrue or would be reasonably
                   expected to prevent or materially impede, interfere with or
                   delay the Arrangement.

             (xvii) Westcoast shall not, nor shall it permit any of its
                    subsidiaries to, agree in writing or otherwise to take any
                    of the actions as described above in clauses (ii) through
                    (xvi).

         (b) Westcoast shall promptly advise Duke Energy in writing:

             (i)   of any event, condition or circumstance that might be
                   reasonably expected to cause any representation or warranty
                   of Westcoast contained in this Agreement to be untrue or
                   inaccurate on the Effective Date (or, in the case of any
                   representation or warranty made as of a specified date, as of
                   such specified date);

             (ii)  of any Material Adverse Effect on Westcoast or any event,
                   occurrence or development which would be reasonably expected
                   to have a Material Adverse Effect on Westcoast; and

             (iii) of any material breach by Westcoast of any covenant,
                   obligation or agreement contained in this Agreement.

         (c) Westcoast shall use its reasonable best efforts to, and shall use
             its reasonable best efforts to cause its subsidiaries to, perform
             all obligations required to be performed by Westcoast or any of its
             subsidiaries under this Agreement, cooperate with Duke Energy in
             connection therewith, and do all such other acts and things as may
             be necessary or desirable in order to consummate and make
             effective, as soon as reasonably practicable, the transactions
             contemplated in this Agreement and, without limiting the generality
             of the foregoing, Westcoast shall:

             (i)   subject to Section 5.6, at the request of Duke Energy,
                   solicit from the Westcoast Securityholders proxies in favour
                   of approval of the Arrangement Resolution and the Westcoast
                   Rights Plan Waiver Resolution (in a commercially reasonable
                   manner) and use reasonable best efforts to obtain the
                   approval by Westcoast Securityholders of the Arrangement and
                   of the Westcoast Rights Plan Waiver Resolution;

             (ii)  subject to the last sentence of Section 5.6(a), not adjourn,
                   postpone or cancel (or propose adjournment, postponement or
                   cancellation of) the Westcoast Meeting without Duke Energy's
                   prior written consent except as required by Laws or, in the
                   case of adjournment, as may be required by Westcoast
                   Securityholders as expressed by majority resolution;

             (iii) use reasonable best efforts to satisfy or cause to be
                   satisfied as soon as reasonably practicable all the
                   conditions precedent that are set forth in Article 6 hereof;


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             (iv)   apply for and use reasonable best efforts to obtain as
                    promptly as practicable all Appropriate Regulatory Approvals
                    relating to Westcoast or any of its subsidiaries and, in
                    doing so, to keep Duke Energy reasonably informed as to the
                    status of the proceedings related to obtaining the
                    Appropriate Regulatory Approvals, including, but not limited
                    to, providing Duke Energy the opportunity to be present for
                    all communications with any Governmental Entity and
                    providing Duke Energy with copies of all related
                    applications and notifications, in draft form, in order for
                    Duke Energy to provide its reasonable comments;

             (v)    apply for and use reasonable best efforts to obtain the
                    Interim Order and the Final Order;

             (vi)   carry out the terms of the Interim Order and the Final Order
                    applicable to it and use reasonable best efforts to comply
                    promptly with all requirements which applicable Laws may
                    impose on Westcoast or its subsidiaries with respect to the
                    transactions contemplated hereby and by the Arrangement;

             (vii)  use reasonable best efforts to defend all lawsuits or other
                    legal, regulatory or other proceedings to which it is a
                    party challenging or affecting this Agreement or the
                    consummation of the transactions contemplated hereby;

             (viii) use reasonable best efforts to have lifted or rescinded any
                    injunction or restraining order or other order which may
                    adversely affect the ability of the parties to consummate
                    the transactions contemplated hereby;

             (ix)   effect all necessary registrations, filings and submissions
                    of information required by Governmental Entities from
                    Westcoast or any of its subsidiaries in connection with the
                    transactions contemplated hereby;

             (x)    consult with Duke Energy prior to making publicly available
                    its financial results for any period after the date of this
                    Agreement and prior to filing any Westcoast SRA Reports or
                    Westcoast SEC Reports;

             (xi)   use reasonable best efforts to obtain all waivers, consents
                    and approvals from other parties to loan agreements, leases
                    or other contracts required to be obtained by Westcoast or a
                    subsidiary of Westcoast to consummate the transactions
                    contemplated hereby which the failure to obtain would
                    materially and adversely affect the ability of Westcoast or
                    its subsidiaries to consummate the transactions contemplated
                    hereby; and

             (xii)  use reasonable best efforts to ensure that Westcoast's
                    affiliates listed in Section 3.14 of the Westcoast
                    Disclosure Letter execute and deliver to Duke Energy, on or
                    prior to the date that is 30 days after the date hereof, an
                    Affiliate's Letter.

         (d) The Board of Directors of Westcoast shall recommend to the
             Westcoast Securityholders the approval of the Arrangement
             Resolution and the Westcoast


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             Rights Plan Waiver Resolution; provided that the Board of Directors
             of Westcoast may withdraw, modify or change its recommendation if
             prior to the approval of the Arrangement by the Westcoast
             Securityholders, Westcoast receives a Superior Proposal that was
             not solicited or encouraged in violation of Section 5.5 and the
             Board of Directors of Westcoast determines in good faith (based
             upon the written opinion of its outside legal counsel) that it is
             necessary for the Board of Directors of Westcoast to take such
             action in order to discharge properly its fiduciary duties. Any
             such withdrawal, change or modification of the Westcoast Board of
             Directors' recommendation of the Arrangement and the Westcoast
             Rights Plan Waiver Resolution shall not change the approval of the
             Board of Directors of Westcoast for any purpose or change the
             obligation of Westcoast to present the Arrangement Resolution and
             the Westcoast Rights Plan Waiver Resolution (without
             recommendation) at a duly called and convened Westcoast Meeting in
             accordance with Westcoast's obligations under this Agreement.

         (e) Westcoast shall not waive the application of Section 3.1 of the
             Westcoast Rights Plan to an Acquisition Proposal unless the
             Acquisition Proposal is a Superior Proposal and Westcoast has
             complied with Section 5.5 and Section 5.6, provided that, in such
             case, the waiver cannot be effective until after the Westcoast
             Meeting and further provided that such waiver cannot be effective
             if the Arrangement Resolution shall have been approved by the
             requisite majority of the Westcoast Securityholders at the
             Westcoast Meeting.

         (f) Prior to the Effective Time, Westcoast will complete the corporate
             reorganizations as set forth in Section 5.1(f) of the Westcoast
             Disclosure Letter, subject only to (i) receipt of any required
             approval of any provincial regulatory body with respect to any
             portion of such reorganization which Westcoast shall use its
             reasonable best efforts to obtain, (ii) receipt of any required

             approvals under Westcoast's existing debt trust indentures and 
             (iii) approval by Duke Energy of the costs to be incurred to
             complete such reorganization.

5.2      COVENANTS OF DUKE ENERGY

         (a) Duke Energy agrees that, until the Effective Date or the earlier
             termination of this Agreement in accordance with Article 7, in each
             case except (x) with the consent of Westcoast to any deviation
             therefrom, (y) with respect to any matters which are disclosed in
             Section 5.2 of the Duke Energy Disclosure Schedule (each of which
             exceptions shall specifically identify the relevant subsection
             hereof to which it relates) or (z) as expressly contemplated by
             this Agreement or the Plan of Arrangement, Duke Energy shall and
             will cause its subsidiaries to:

             (i)   subject to Section 5.2(c)(viii), not adopt or propose to
                   adopt any amendments to its governing documents or the
                   governing documents of Exchangeco which would have a material
                   adverse impact on the consummation of the transactions
                   contemplated hereby; and

             (ii)  not take any action which may jeopardize the exchange of the
                   Westcoast Common Shares by holders of the Westcoast Common
                   Shares in Canada for


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                   the purposes of the Income Tax Act (Canada) from being
                   treated on a tax deferred basis under the Income Tax Act
                   (Canada) for holders who are otherwise eligible for such
                   treatment.

         (b) Duke Energy shall promptly advise Westcoast in writing:

             (i)   of any event, condition or circumstance that might be
                   reasonably expected to cause any representation or warranty
                   of the Duke Energy Parties contained in this Agreement to be
                   untrue or inaccurate on the Effective Date (or, in the case
                   of any representation or warranty made as of a specified
                   date, as of such specified date);

             (ii)  of any Material Adverse Effect on Duke Energy or any event,
                   occurrence or development which would be reasonably expected
                   to have a Material Adverse Effect on Duke Energy; and

             (iii) of any material breach by any of the Duke Energy Parties of
                   any of their covenants, obligations or agreements contained
                   in this Agreement.

         (c) Duke Energy shall use its reasonable best efforts to, and shall use
             its reasonable best efforts to cause its subsidiaries to, perform
             all obligations required to be performed by it or any of its
             subsidiaries under this Agreement, cooperate with Westcoast in
             connection therewith, and do all such other acts and things as may
             be necessary or desirable in order to consummate and make
             effective, as soon as reasonably practicable, the transactions
             contemplated by this Agreement and, without limiting the generality
             of the foregoing:

             (i)   use reasonable best efforts to satisfy or cause to be
                   satisfied as soon as reasonably practicable all conditions
                   precedent that are set forth in Article 6 hereof;

             (ii)  apply for and use reasonable best efforts to obtain promptly
                   all Appropriate Regulatory Approvals relating to Duke Energy
                   or any of its subsidiaries, and, in doing so, to keep
                   Westcoast reasonably informed as to the status of the
                   proceedings related to obtaining the Appropriate Regulatory
                   Approvals, including, but not limited to, providing Westcoast
                   with copies of all related applications and notifications, in
                   draft form, in order for Westcoast to provide its reasonable
                   comments;

             (iii) carry out the terms of the Interim Order and Final Order
                   applicable to it and use reasonable best efforts to comply
                   promptly with all requirements which applicable Laws may
                   impose on the Duke Energy Parties with respect to the
                   transactions contemplated hereby and by the Arrangement;

             (iv)  in respect of holders of Westcoast Common Shares who are not
                   exempt from tax under Part 1 of the Income Tax Act (Canada)
                   and who receive Exchangeable Shares under the Arrangement, to
                   cause Exchangeco to enter


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                    into elections with such holders under Section 85 of the
                    Income Tax Act (Canada) and any equivalents thereof under
                    provincial Laws;

             (v)    use reasonable best efforts to defend all lawsuits or other
                    legal, regulatory or other proceedings to which it is a
                    party challenging or affecting this Agreement or the
                    consummation of the transactions contemplated hereby;

             (vi)   use reasonable best efforts to have lifted or rescinded any
                    injunction or restraining order or other order relating to
                    the Duke Energy Parties which may adversely affect the
                    ability of the parties to consummate the transactions
                    contemplated hereby;

             (vii)  effect all necessary registrations, filings and submissions
                    of information required by Governmental Entities from the
                    Duke Energy Parties or their subsidiaries in connection with
                    the transactions contemplated hereby;

             (viii) cause governing documents of Exchangeco to be amended, among
                    other things, to create the Exchangeable Shares;

             (ix)   reserve or have available a sufficient number of Duke Energy
                    Common Shares for issuance upon the completion of the
                    Arrangement and the exchange from time to time of
                    Exchangeable Shares and the exercise from time to time of
                    Replacement Options and use reasonable best efforts to cause
                    such Duke Energy Common Shares to be approved for listing on
                    The New York Stock Exchange, subject to official notice of
                    issuance, prior to the Effective Time;

             (x)    use reasonable best efforts (A) to cause the Exchangeable
                    Shares to be listed for trading on The Toronto Stock
                    Exchange by the Effective Date and (B) to ensure that
                    Exchangeco remains a "public corporation" within the meaning
                    of the Income Tax Act (Canada) for so long as there are
                    Exchangeable Shares outstanding (other than those
                    Exchangeable Shares held by Duke Energy or any of its
                    affiliates); and

             (xi)   use reasonable best efforts to obtain all waivers, consents
                    and approvals from other parties to loan agreements, leases
                    or other contracts required to be obtained by Duke Energy or
                    any subsidiary of Duke Energy to consummate the transactions
                    contemplated hereby which the failure to obtain would
                    materially and adversely affect the ability of the Duke
                    Energy Parties to consummate the transactions contemplated
                    hereby.

5.3      ACCESS TO INFORMATION

         (a) Subject to Section 5.3(b) and applicable Laws, upon reasonable
             notice to an officer or business unit head of Westcoast, Westcoast
             shall (and shall cause each of its subsidiaries to) afford the
             officers, employees, counsel, accountants and other authorized
             representatives and advisors ("Representatives") of Duke Energy
             access, during normal business hours from the date hereof and until
             the earlier of the Effective Date or the termination of this
             Agreement, to its properties, books, contracts


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             and records as well as to its management personnel; provided that
             such access shall be provided on a basis that minimizes the
             disruption to the operations of Westcoast. During such period,
             Westcoast shall (and shall cause each of its subsidiaries to)
             furnish promptly to Duke Energy all information concerning
             Westcoast's business, properties and personnel as Duke Energy may
             reasonably request. Subject to Section 5.3(b) and applicable Laws,
             Duke Energy shall afford the Representatives of Westcoast access
             during normal business hours from the date hereof and until the
             earlier of the Effective Date or the termination of this Agreement,
             to such of Duke Energy's management personnel as Westcoast may
             request, acting reasonably.

         (b) The Duke Energy Parties and Westcoast acknowledge that certain
             information received pursuant to Section 5.3(a) will be non-public
             or proprietary in nature and as such will be deemed to be
             "Confidential Information" for purposes of the Confidentiality
             Agreement. The Duke Energy Parties and Westcoast further
             acknowledge their obligation to maintain the confidentiality of
             such Confidential Information in accordance with the
             Confidentiality Agreement.

5.4      INDEMNIFICATION

         (a) Duke Energy agrees that all rights to indemnification for acts or
             omissions occurring prior to the Effective Time existing as of the
             date hereof in favour of the directors or officers of Westcoast as
             provided in its governing documents or in written contracts in
             effect on the date hereof, shall survive the Arrangement and shall
             continue in full force and effect until the earlier of the
             expiration of the applicable statute of limitations with respect to
             any claims against directors or officers of Westcoast arising out
             of such acts or omissions and the sixth anniversary of the
             Effective Date, and Duke Energy hereby assumes, effective upon
             consummation of the Arrangement, all such liability with respect to
             any matters arising prior to the Effective Time.

         (b) Duke Energy shall use reasonable best efforts to cause to be
             maintained in effect, for not less than six years from the
             Effective Time, substantially the same coverage and containing
             substantially similar terms and conditions for acts and omissions
             prior to the Effective Time under the current policies of the
             directors' and officers' liability insurance maintained by
             Westcoast so long as the annual premium therefor would not be in
             excess of 200% of the last annual premium paid prior to the date
             hereof.

5.5      COVENANTS REGARDING NON-SOLICITATION

         (a) Westcoast shall immediately cease and cause to be terminated any
             existing solicitation, encouragement, activity, discussion or
             negotiation with any parties by Westcoast, any of its subsidiaries
             or any of its or its subsidiaries' officers, directors, employees,
             representatives and agents with respect to an Acquisition Proposal
             whether or not initiated by Westcoast and in connection therewith,
             Westcoast shall request (and exercise all rights it has to require)
             the return of information regarding Westcoast and its subsidiaries
             previously provided to such parties and shall request (and exercise
             all rights it has to require) the destruction of all materials
             including or incorporating any information regarding Westcoast and
             its subsidiaries.


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         (b) Subject to Section 5.6, Westcoast agrees that it shall not, and
             shall not authorize or permit any of its subsidiaries or any of its
             or its subsidiaries' officers, directors, employees,
             representatives or agents, directly or indirectly, to (i) solicit,
             initiate, encourage or knowingly facilitate, including by way of
             furnishing information or entering into any form of agreement,
             arrangement or understanding, any inquiries or the making of any
             proposals regarding an Acquisition Proposal, (ii) participate in
             any discussions or negotiations regarding any Acquisition Proposal,
             (iii) withdraw or modify in a manner adverse to Duke Energy the
             approval or recommendation of the Board of Directors of Westcoast
             of the transactions contemplated hereby, (iv) approve or recommend
             any Acquisition Proposal or (v) enter into any agreement,
             arrangement or understanding related to any Acquisition Proposal or
             requiring Westcoast to abandon, terminate or fail to consummate the
             Arrangement or providing for the payment of any break, termination
             or other fees or expenses to any person in the event that Westcoast
             or any of its subsidiaries completes the transactions contemplated
             hereby or any other transaction with Duke Energy or any of its
             affiliates agreed to prior to any termination of this Agreement.
             Notwithstanding the preceding sentence and any other provisions of
             this Agreement, the Board of Directors of Westcoast may, prior to
             the approval of the Arrangement by the Westcoast Securityholders,
             consider, participate in any discussions or negotiations with, or
             provide information in accordance with the last sentence of this
             paragraph to, any person who has delivered a bona fide written
             Acquisition Proposal which was not solicited or encouraged after
             the date of this Agreement and did not otherwise result from a
             breach of this Section 5.5 and that the Board of Directors of
             Westcoast determines in good faith, after consultation with its
             financial advisors and outside legal counsel, is a Superior
             Proposal; provided, however, that prior to taking any such action,
             (x) the Board of Directors of Westcoast must receive written advice
             of outside counsel that it is necessary for the Board of Directors
             of Westcoast to take such action in order to discharge properly its
             fiduciary duties and (y) Westcoast must obtain a confidentiality
             agreement from the person making such Acquisition Proposal that is
             substantively the same as the Confidentiality Agreement, including
             a standstill provision at least as stringent as contained in the
             Confidentiality Agreement; provided further that Westcoast shall
             not commence discussions or negotiations with, or provide
             information to any person who has delivered an unsolicited bona
             fide written Acquisition Proposal until 48 hours after Westcoast
             shall have advised Duke Energy of its determination that such
             Acquisition Proposal constitutes a Superior Proposal and of its
             intention to take such actions. Westcoast shall not consider,
             negotiate, accept, approve or recommend an Acquisition Proposal or
             provide information to any person proposing an Acquisition
             Proposal, in each case after the date of the approval of the
             Arrangement by the Westcoast Securityholders. If Westcoast receives
             a request for material non-public information from a person who has
             made an unsolicited bona fide written Acquisition Proposal and
             Westcoast is permitted, as contemplated under the second sentence
             of this Section 5.5(b), to negotiate the terms of such Acquisition
             Proposal, then, and only in such case, the Board of Directors of
             Westcoast may, subject to the execution by such person of the
             confidentiality agreement as described in (y) above, provide such
             person with access to information regarding Westcoast; provided
             that Westcoast sends a copy of any such


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             confidentiality agreement to Duke Energy promptly upon its
             execution and Duke Energy is provided with a list of, and copies

             of, the information provided to such person and is immediately
             provided with access to similar information to which such person
             was provided.

         (c) From and after the date of this Agreement, Westcoast shall promptly
             (and in any event within 24 hours) notify Duke Energy, at first
             orally and then in writing, of any inquiries, proposals or offers
             relating to or constituting an Acquisition Proposal, or any request
             for non-public information relating to Westcoast or any of its
             subsidiaries. Such notice shall include a description of the terms
             and conditions of any proposal, inquiry or offer, the identity of
             the person making such proposal, inquiry or offer and provide such
             other details of the proposal, inquiry or offer as Duke Energy may
             reasonably request. Westcoast shall keep Duke Energy fully informed
             on a prompt basis of the status, including any change to the
             material terms, of any such inquiry, proposal or offer.

         (d) Westcoast shall ensure that its officers, directors and employees
             and its subsidiaries and their officers, directors and employees
             and any financial advisors or other advisors or representatives
             retained by it are aware of the provisions of this Section 5.5, and
             it shall be responsible for any breach of this Section 5.5 by such
             officers, directors, employees, financial advisors or other
             advisors or representatives.

5.6      RIGHT TO ACCEPT A SUPERIOR PROPOSAL

         (a) If Westcoast has complied with Section 5.5 with respect thereto,
             Westcoast may accept, approve, recommend or enter into any
             agreement, understanding or arrangement in respect of a Superior
             Proposal prior to the approval of the Arrangement by the Westcoast
             Securityholders if, and only if (with the exception of a
             confidentiality agreement the execution of which shall not be
             subject to the conditions of this Section 5.6), (i) Westcoast has
             provided Duke Energy with a copy of the Superior Proposal document,
             (ii) five Business Days shall have elapsed from the later of (x)
             the date Duke Energy received written notice (a "Section 5.6
             Notice") advising Duke Energy that Westcoast's Board of Directors
             has resolved, subject only to compliance with this Section 5.6, to
             accept, approve, recommend or enter into an agreement in respect of
             such Superior Proposal, specifying the terms and conditions of such
             Superior Proposal and identifying the person making such Superior
             Proposal, and (y) the date Duke Energy received a copy of such
             Superior Proposal, (iii) Westcoast's Board of Directors has
             determined in good faith (based upon the written opinion of its
             outside legal counsel) that it is necessary for the Board of
             Directors of Westcoast to take such action in order to discharge
             properly its fiduciary duties, (iv) such Superior Proposal does not
             provide for the payment of any break, termination or other fees or
             expenses to the other party in the event that Westcoast or any of
             its subsidiaries completes the transactions contemplated by this
             Agreement or any other transaction with Duke Energy or any of its
             affiliates agreed to prior to any termination of this Agreement,
             and (v) Westcoast has previously or concurrently will have paid to
             Duke Energy the Termination Fee, if any, payable under Section 7.3.
             In the event that Westcoast provides Duke Energy with a Section 5.6
             Notice on a date


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             that is less than five Business Days prior to the Westcoast
             Meeting, Westcoast shall adjourn the Westcoast Meeting (without
             notice on the Arrangement or any related matters) to a date that is
             not less than five Business Days and not more than 10 Business Days
             after the date of the Section 5.6 Notice.

         (b) During the five Business Day period referred to in Section
             5.6(a)(ii), Westcoast agrees that Duke Energy shall have the right,
             but not the obligation, to offer to amend the terms of this
             Agreement. The Board of Directors of Westcoast will review any
             proposal by Duke Energy to amend the terms of this Agreement in
             good faith in order to determine, in its discretion in the exercise
             of its fiduciary duties, whether Duke Energy's amended proposal
             upon acceptance by Westcoast would result in such Superior Proposal
             ceasing to be a Superior Proposal. If the Board of Directors of
             Westcoast so determines, it will enter into an amended agreement
             with Duke Energy reflecting Duke Energy's amended proposal. If the
             Board of Directors of Westcoast continues to believe, in good faith
             and after consultation with financial advisors and outside counsel,
             that such Superior Proposal remains a Superior Proposal and
             therefore rejects Duke Energy's amended proposal, Westcoast may,
             subject to the terms of this Agreement, accept, approve, recommend
             or enter into an agreement, understanding or arrangement in respect
             of such Superior Proposal.

         (c) Westcoast also acknowledges and agrees that each successive
             material modification of any Acquisition Proposal shall constitute
             a new Acquisition Proposal for purposes of Section 5.5 and the
             requirement under clause (ii) of Section 5.6(a) to initiate an
             additional five Business Day notice period.

5.7      EMPLOYEE BENEFITS AND RELATED MATTERS

         Duke Energy agrees, and after the Effective Time will cause Westcoast
or any of its subsidiaries, as the case may be, to:

         (a) from the Effective Time through December 31, 2002, provide Affected
             Employees, taken as a whole, employee benefits pursuant to employee
             benefit plans, programs, policies or arrangements maintained by
             Duke Energy or any subsidiary of Duke Energy providing coverage and
             benefits which, in the aggregate, are no less favourable than (i)
             those provided to Affected Employees immediately prior to the
             Effective Time (other than benefits provided pursuant to Westcoast
             Employee Share Purchase Plans) or, (ii) if elected by Duke Energy
             with respect to all or certain Affected Employees, those provided
             from time to time after the Effective Time to employees of Duke
             Energy or its subsidiaries who are similarly situated, in terms of
             their positions, tenure and geographic locations, to such Affected
             Employees; "Affected Employees" means individuals who are actively
             employed by Westcoast or any of its subsidiaries as of the
             Effective Time, are not subject to a collective bargaining
             agreement and who remain employed with Duke Energy or any
             subsidiary of Duke Energy;

         (b) give each Affected Employee full credit for purposes of determining
             severance pay and eligibility to participate, vesting and benefit
             accrual (except for purposes of


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             benefit accrual under any defined benefit pension plans, or to the
             extent such treatment would result in duplicative accrual on or
             after the Effective Date of benefits for the same period maintained
             by Duke Energy or any subsidiary of Duke Energy), for such Affected
             Employee's service with Westcoast or any subsidiary of Westcoast to
             the same extent and for the same purpose recognized by Westcoast
             immediately prior to the Effective Time and previously disclosed to
             Duke Energy;

         (c) waive all limitations as to preexisting conditions exclusions with
             respect to participation and coverage requirements applicable to
             the Affected Employees under any medical or dental benefit plans
             maintained by Duke Energy in which such employees may be eligible
             to participate, other than preexisting conditions exclusions
             imposed with respect to any Affected Employee immediately prior to
             such participation under any medical or dental plan maintained by
             Westcoast for the Affected Employees and other than preexisting
             conditions exclusions imposed by third-party health benefit
             providers; and

         (d) provide that any co-payments and deductibles paid by Affected
             Employees under a welfare plan maintained by Westcoast during the
             plan year in which the coverage under a similar type of welfare
             plan maintained by Duke Energy begins shall be taken into account
             in satisfying any applicable deductible or out-of-pocket
             requirements under such Duke Energy welfare plan to the same extent
             such expenses are taken into account for the benefit of similarly
             situated employees of Duke Energy and its subsidiaries.

         Nothing herein shall be construed as (i) requiring Duke Energy to
continue the employment of any Affected Employee following the Effective Time,
(ii) limiting Duke Energy's ability to amend, modify or terminate any individual
employee benefit plan or arrangement of Westcoast, Duke Energy or any of their
respective subsidiaries, or (iii) requiring Duke Energy to maintain any
particular level of employee benefits for any individual employee following the
Effective Time subject to compliance with Section 5.7(a).

5.8      PROHIBITION ON VOLUNTARY LIQUIDATION

         Duke Energy shall not, and shall cause its subsidiaries not to, take
any action relating to a voluntary liquidation, dissolution or winding-up of
Exchangeco, as the case may be, prior to the Redemption Date (as defined in the
Plan of Arrangement).

5.9      CONVERSION OF WESTCOAST PREFERRED SHARES

         (a) On or prior to September 30, 2001, Westcoast shall deliver a
             conversion notice (specifying a 30-day notice period) to the
             holders of the outstanding Westcoast First Preferred Shares, Series
             2 regarding the conversion of such shares into Westcoast Common
             Shares in accordance with the terms of such First Preferred Shares,
             Series 2. Westcoast shall complete such conversion by such time as
             is necessary to enable such holders to be holders entitled to
             receive notice of the Westcoast Meeting. Notwithstanding any other
             provision of this Agreement, the acts of Westcoast to convert the
             Westcoast First Preferred Shares, Series 2 in accordance with their
             terms


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             and this Section 5.9 shall be deemed not to breach or violate or
             fail to satisfy any representations, warranties, covenants or
             obligations of Westcoast under this Agreement.

         (b) Westcoast shall within two Business Days provide written notice to
             a designated officer of Duke Energy of any conversion notice given
             to Westcoast by a holder of First Preferred Shares, Series 5 (a
             "Series 5 Conversion Notice") or any conversion notice given to
             Westcoast by a holder of UEI Holdings Inc. First Series Preferred
             Shares (a "UEI Conversion Notice"). Westcoast shall redeem, unless
             Duke Energy otherwise consents, all such First Preferred Shares,
             Series 5 in respect of which a Series 5 Conversion Notice is given,
             in accordance with the terms of such First Preferred Shares, Series
             5 and shall redeem, unless Duke Energy otherwise consents, all such
             UEI Holdings Inc. First Series Preferred Shares in respect of which
             a UEI Conversion Notice is given, in accordance with the terms of
             such UEI Holdings Inc. First Series Preferred Shares, as the case
             may be. Notwithstanding any other provision of this Agreement, the
             acts of Westcoast to redeem the First Preferred Shares, Series 5
             and the UEI Holdings Inc. First Series Preferred Shares in
             accordance with their respective terms and this Section 5.9 shall
             be deemed not to breach or violate or fail to satisfy any
             representations, warranties, covenants or obligations of Westcoast
             under this Agreement.

5.10     CLOSING MATTERS

         Each of the Duke Energy Parties and Westcoast shall deliver, at the
Effective Time, such customary certificates, resolutions and other closing
documents as may be required by the other parties hereto, acting reasonably.

                                    ARTICLE 6

                                   CONDITIONS

6.1      MUTUAL CONDITIONS

         The respective obligations of the parties hereto to consummate the
Arrangement shall be subject to the satisfaction of the following conditions on
or before the Effective Date:

         (a) the Arrangement shall have been approved by the Westcoast
             Securityholders at the Westcoast Meeting in the manner required by
             applicable Laws (including any conditions imposed by the Interim
             Order);

         (b) the Interim Order and the Final Order shall each have been obtained
             in form and on terms satisfactory to each of Duke Energy and
             Westcoast, acting reasonably, and shall not have been set aside or
             modified in a manner unacceptable to such parties, acting
             reasonably, on appeal or otherwise;

         (c) the Form S-3 shall have become effective under the 1933 Act and no
             stop order suspending the effectiveness of the Form S-3 shall be in
             effect and no proceedings for


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             such purpose shall be pending before the SEC, and Duke Energy shall
             have received all United States state securities or "blue sky"
             authorizations necessary to issue the Duke Energy Common Shares to
             be issued pursuant to the Arrangement or upon exchange for the
             Exchangeable Shares;

         (d) no provision of any applicable Laws and no judgment, injunction,
             order or decree shall be in effect which restrains or enjoins or
             otherwise prohibits the consummation of the Arrangement or the
             transactions contemplated by this Agreement;

         (e) the Exchangeable Shares issuable pursuant to the Arrangement shall
             have been conditionally approved for listing on The Toronto Stock
             Exchange, subject to the filing of required documentation, and the
             Duke Energy Common Shares issuable at the Effective Time pursuant
             to the Arrangement, upon exchange of the Exchangeable Shares from
             time to time and upon exercise of the Replacement Options from time
             to time shall have been approved for listing on The New York Stock
             Exchange, subject to official notice of issuance; and

         (f) the Appropriate Regulatory Approvals shall have been obtained and
             be in full force and effect and shall not be subject to any
             stop-order or proceeding seeking a stop-order or revocation; and

         (g) all other consents, waivers, permits, orders and approvals of any
             Governmental Entity, and the expiry of any waiting periods, in
             connection with, or required to permit, the consummation of the
             Arrangement, the failure to obtain which or the non-expiry of which
             would constitute a criminal offense, or would, individually or in
             the aggregate, have a Material Adverse Effect on Duke Energy or
             Westcoast after the Effective Time, shall have been obtained or
             received.

6.2      ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF THE DUKE ENERGY PARTIES

         The obligations of the Duke Energy Parties to consummate the
Arrangement shall be subject to the satisfaction of the following conditions
(each of which is for the exclusive benefit of the Duke Energy Parties and may
be waived by Duke Energy on behalf of the Duke Energy Parties) on or before the
Effective Date:

         (a) Westcoast shall have performed or complied with, in all material
             respects, each of its obligations, covenants and agreements
             hereunder to be performed and complied with by it on or before the
             Effective Time;

         (b) each of the representations and warranties of Westcoast under this
             Agreement (which for purposes of this clause (b) shall be read as
             though none of them contained any Material Adverse Effect or other
             materiality qualification), except for the representations and
             warranties set forth in Sections 3.1, 3.2 and 3.3, shall be true
             and correct in all respects on the date of this Agreement and as of
             the Effective Date as if made on and as of such date (except for
             such representations and warranties made as of a specified date,
             which shall be true and correct as of such specified date) except
             where the failure of such representations and warranties in the
             aggregate to be true and correct in all respects would not be
             reasonably expected to have a Material


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             Adverse Effect on Westcoast. Each of the representations and
             warranties of Westcoast set forth in Sections 3.1, 3.2 and 3.3 of
             this Agreement shall be true and correct in all material respects
             on the date of this Agreement and on the Effective Date as if made
             on and as of such date (except for such representations and
             warranties made as of a specified date, which shall be true and
             correct in all material respects as of such specified date);

         (c) Since the date of this Agreement, there shall have been no Material
             Adverse Effect with respect to Westcoast or any event, occurrence
             or development which would be reasonably expected to have a
             Material Adverse Effect on Westcoast or which would materially and
             adversely affect the ability of Westcoast to consummate the
             transactions contemplated hereby;

         (d) Duke Energy shall have received a certificate of Westcoast
             addressed to the Duke Energy Parties and dated the Effective Date,
             signed on behalf of Westcoast by two senior executive officers of
             Westcoast, confirming that the conditions in Sections 6.2(a), (b)
             and (c) have been satisfied;

         (e) there shall not be any action taken, any Law enacted, entered,
             enforced or deemed applicable by any Governmental Entity or pending
             or threatened any suit, action or proceeding by any Governmental
             Entity in connection with the grant of any Appropriate Regulatory
             Approval or otherwise, (i) seeking to prohibit or restrict the
             acquisition by Duke Energy or any of its subsidiaries of any
             Westcoast Common Shares, (ii) challenging or seeking to restrain or
             prohibit the consummation of the Plan of Arrangement or seeking to
             obtain from Westcoast or Duke Energy any damages that are material
             in relation to Westcoast and its subsidiaries taken as a whole,
             (iii) seeking to prohibit or materially limit the ownership or
             operation by Duke Energy or any of its subsidiaries of any material
             portion of the business or assets of Duke Energy, Westcoast or any
             of their respective subsidiaries or to compel Duke Energy or any of
             its subsidiaries to dispose of or hold separate any material
             portion of the business or assets of Duke Energy or Westcoast or
             any of their respective subsidiaries, as a result of the Plan of
             Arrangement, (iv) seeking to impose limitations on the ability of
             Duke Energy or any of its subsidiaries to acquire or hold, or
             exercise full rights of ownership of, any Westcoast Common Shares,
             including the right to vote the Westcoast Common Shares purchased
             by it on all matters properly presented to the shareholders of
             Westcoast, (v) seeking to prohibit Duke Energy or any of its
             subsidiaries from effectively controlling in any material respect
             the business or operations of Westcoast and its subsidiaries or
             (vi) imposing any condition or restriction that in the judgment of
             Duke Energy, acting reasonably, would be materially burdensome to
             the future operations or business of any business unit of Duke
             Energy or Westcoast after the Effective Time;

         (f) the Board of Directors of Westcoast shall have adopted all
             necessary resolutions, and all other necessary corporate action
             shall have been taken by Westcoast and its subsidiaries to permit
             the consummation of the Arrangement;


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         (g) the holders of Westcoast Common Shares shall have approved the
             Westcoast Rights Plan Waiver Resolution;

         (h) Duke Energy shall have received a customary "Comfort Letter" from
             Ernst & Young LLC, dated the Effective Date in form and substance
             reasonably satisfactory to Duke Energy, in connection with the
             procedures undertaken by them with respect to the financial
             statements of Westcoast and its subsidiaries to be contained in or
             incorporated by reference into any filing by Duke Energy with the
             SEC;

         (i) holders of not more than 10% of the Westcoast Common Shares shall
             have exercised their Dissent Rights (and not withdrawn such
             exercise) in respect of the Arrangement;

         (j) all outstanding Westcoast First Preferred Shares, Series 2 shall
             have been converted into Westcoast Common Shares in accordance with
             the terms of such First Preferred Shares, Series 2;

         (k) the consents and approvals set forth in Section 3.4 of the
             Westcoast Disclosure Letter shall have been obtained or received;
             and

         (l) to the extent required, approval of the New York Public Services
             Commission under the New York Public Services Law.

6.3      ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF WESTCOAST

         The obligations of Westcoast to consummate the Arrangement shall be
subject to satisfaction of the following conditions (each of which is for the
exclusive benefit of Westcoast and may be waived by Westcoast) on or before the
Effective Date:

         (a) the Duke Energy Parties shall have performed or complied with, in
             all material respects, each of their obligations, covenants and
             agreements hereunder to be performed and complied with by them on
             or before the Effective Time;

         (b) each of the representations and warranties of the Duke Energy
             Parties under this Agreement (which for purposes of this clause (b)
             shall be read as though none of them contained any Material Adverse
             Effect or other materiality qualification), except for the
             representations and warranties set forth in Sections 4.1, 4.2 and
             4.3, shall be true and correct in all respects on the date of this
             Agreement and as of the Effective Date as if made on and as of such
             date (except for such representations and warranties made as of a
             specified date, which shall be true and correct as of such
             specified date) except where the failure of such representations
             and warranties in the aggregate to be true and correct in all
             respects would not be reasonably expected to have a Material
             Adverse Effect on Duke Energy. Each of the representations and
             warranties of the Duke Energy Parties set forth in Sections 4.1,
             4.2 and 4.3 of this Agreement shall be true and correct in all
             material respects on the date of this Agreement and on the
             Effective Date as if made on and as of such date (except for such
             representations and


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             warranties made as of a specified date, which shall be true and
             correct in all material respects as of such specified date);

         (c) Since the date of this Agreement, there shall have been no Material
             Adverse Effect with respect to Duke Energy or any event, occurrence
             or development which would be reasonably expected to have a
             Material Adverse Effect on Duke Energy or which would materially
             and adversely affect the ability of Duke Energy to consummate the
             transactions contemplated hereby except those which were disclosed
             in the Circular as amended or supplemented;

         (d) Westcoast shall have received a certificate of Duke Energy
             addressed to Westcoast and dated the Effective Date, signed on
             behalf of Duke Energy by two senior executive officers of Duke
             Energy, confirming that the conditions in Sections 6.3(a), (b) and
             (c) have been satisfied; and

         (e) the Board of Directors of Duke Energy shall have adopted all
             necessary resolutions, and all other necessary corporate action
             shall have been taken by Duke Energy and its subsidiaries, to
             permit the consummation of the Arrangement.

6.4      SATISFACTION OF CONDITIONS

         The conditions precedent set out in Sections 6.1, 6.2 and 6.3 shall be
conclusively deemed to have been satisfied, waived or released when, with the
agreement of Duke Energy and Westcoast, a certificate of arrangement in respect
of the Arrangement is issued by the Director.

                                    ARTICLE 7

                            AMENDMENT AND TERMINATION

7.1      AMENDMENT

         This Agreement may not be amended except by mutual written agreement of
the parties hereto; provided that after approval by the Westcoast
Securityholders, no amendment may be made that by Law requires further approval
or authorization by the Westcoast Securityholders without such further approval
or authorization.

7.2      TERMINATION

         This Agreement may be terminated and the Arrangement abandoned at any
time prior to the Effective Time (notwithstanding any approval of the
Arrangement by the Westcoast Securityholders):

         (a) by the mutual written consent of Duke Energy and Westcoast (without
             further action on the part of the Westcoast Securityholders if
             terminated after the Westcoast Meeting);

         (b) by either Westcoast or Duke Energy, if there shall be any Law that
             makes consummation of the Arrangement illegal or otherwise
             prohibited, or if any judgment,


                             COMBINATION AGREEMENT
                                       59
   64


             injunction, order or decree of a competent Governmental Entity
             (other than any order from the Court refusing to grant the Final
             Order) enjoining Duke Energy or Westcoast from consummating the
             Arrangement shall be entered and such judgment, injunction, order
             or decree shall have become final and non-appealable;

         (c) by either Westcoast or Duke Energy, if the Effective Date does not
             occur on or prior to September 20, 2002; provided, however, that
             the right to terminate this Agreement under this Section 7.2(c)
             shall not be available to any party whose failure or whose
             affiliate's failure to perform any material covenant, agreement or
             obligation hereunder has been the cause of, or resulted in, the
             failure of the Effective Date to occur on or before such date;

         (d) by Duke Energy if, (i) the Board of Directors of Westcoast fails to
             recommend or withdraws, modifies or changes its approval or
             recommendation of this Agreement, the Arrangement, the Arrangement
             Resolution or the Westcoast Rights Plan Waiver Resolution in a
             manner adverse to Duke Energy or recommends or approves a Superior
             Proposal, (ii) the Board of Directors of Westcoast fails to affirm
             its approval or recommendation of this Agreement, the Arrangement,
             the Arrangement Resolution or the Westcoast Rights Plan Waiver
             Resolution within 10 Business Days of any written request to do so
             from Duke Energy, (iii) the Arrangement Resolution and the
             Westcoast Rights Plan Waiver Resolution are not submitted for
             approval at the Westcoast Meeting, or the Westcoast Meeting is not
             held prior to January 31, 2002 or such later date to which the
             Westcoast Meeting shall have been adjourned or postponed as may be
             permitted pursuant to Section 5.6(a); provided that in the event a
             Force Majeure has occurred which makes giving notice of the
             Westcoast Meeting impractical, or if such notice has already been
             given, makes holding the Westcoast Meeting impractical on or prior
             to such date, such date shall be extended until the earlier of the
             thirty-fifth day after the cessation of such Force Majeure or March
             31, 2002, or (iv) Westcoast shall have breached in any material
             respect its obligations under Section 5.5 or 5.6;

         (e) (i) by either Westcoast or Duke Energy, if at the Westcoast
             Meeting, the requisite vote of Westcoast Securityholders to approve
             the Arrangement shall not be obtained or (ii) by either Westcoast
             or Duke Energy, if approval of the Court of the Final Order shall
             not be obtained, or (iii) by Duke Energy, if at the Westcoast
             Meeting, the requisite vote of holders of Westcoast Common Shares
             to approve the Westcoast Rights Plan Waiver Resolution shall not be
             obtained;

         (f) by Duke Energy, if Westcoast has breached any of its
             representations, warranties, agreements or obligations herein which
             breach would result in the failure to satisfy one or more
             conditions set forth in Section 6.2(a) or Section 6.2(b) and such
             breach is not curable or if curable, is not cured within 30 days
             after notice thereof has been received by the party alleged to be
             in breach; or

         (g) by Westcoast, if any of the Duke Energy Parties has breached any of
             its representations, warranties, agreements or obligations herein
             which breach would result in the failure to satisfy one or more
             conditions set forth in Section 6.1(a) or


                             COMBINATION AGREEMENT
                                       60
   65


             Section 6.1(b) and such breach is not curable or if curable, is not
             cured within 30 days after notice thereof has been received by the
             party alleged to be in breach.

7.3      EFFECT OF TERMINATION

         (a) If this Agreement is terminated in accordance with the provisions
             of Section 7.2, no party shall have any further liability to
             perform its obligations hereunder except for the provisions of this
             Section 7.3 and Section 5.3(b) and Section 8.9; provided that
             neither the termination of this Agreement nor anything contained in
             this Section 7.3 shall relieve any party from any liability for any
             breach by it of this Agreement, including from any inaccuracy in
             its representations and warranties and any non-performance by it of
             its covenants and agreements made herein. If it shall be judicially
             determined that termination of this Agreement was caused by an
             intentional breach of this Agreement, then, in addition to any
             other remedies at law or equity for breach of this Agreement, the
             party so found to have intentionally breached this Agreement shall
             indemnify and hold harmless the other parties for their
             out-of-pocket costs, including fees and expenses of their counsel,
             accountants, financial advisors and other experts and advisors,
             incident to the negotiation, preparation and execution of this
             Agreement and related documentation.

         (b) If this Agreement is terminated:

             (i)   by Duke Energy pursuant to Section 7.2(d); or

             (ii)  by either Party pursuant to Section 7.2(e)(i) or by Duke
                   Energy pursuant to Section 7.2(e)(iii) and at any time after
                   the date of this Agreement and prior to such termination a
                   bona fide Acquisition Proposal with respect to Westcoast or
                   its subsidiaries shall have been made, or any proposal or
                   expression of interest by a third party regarding an
                   Acquisition Proposal shall have been publicly disclosed;

             then Westcoast will, in the case of a termination by Duke Energy,
             within three Business Days following any such termination or, in
             the case of a termination by Westcoast, prior to such termination,
             pay to Duke Energy in cash by wire transfer in immediately
             available funds to an account designated by Duke Energy the
             Termination Fee.

         (c) If this Agreement is terminated by either party pursuant to Section
             7.2(e)(i) or by Duke Energy pursuant to Section 7.2(e)(iii) and
             after the date of this Agreement and prior to such termination no
             bona fide Acquisition Proposal with respect to Westcoast or its
             subsidiaries shall have been made, and at such time no proposal or
             expression of interest by a third party regarding an Acquisition
             Proposal shall have been publicly disclosed and within 12 months
             after the date of such termination, Westcoast enters into any
             agreement for an Acquisition Proposal or consummates a transaction
             that constitutes an Acquisition Proposal, Westcoast will, prior to
             the earlier of consummation of a transaction that constitutes an
             Acquisition Proposal, or execution of a definitive agreement with
             respect thereto, pay to Duke Energy in cash by wire


                             COMBINATION AGREEMENT
                                       61
   66


             transfer in immediately available funds to an account designated by
             Duke Energy, the Termination Fee.

         (d) If this Agreement is terminated by Duke Energy pursuant to Section
             7.2(f) and after the date of this Agreement and prior to such
             termination no bona fide Acquisition Proposal with respect to
             Westcoast or its subsidiaries shall have been made, and at such
             time no proposal or expression of interest by a third party
             regarding an Acquisition Proposal shall have been publicly
             disclosed, or if this Agreement is terminated by Westcoast pursuant
             to 7.2(g), then Westcoast or Duke Energy, as the case may be, will,
             within three Business Days following notice of such termination,
             pay to the terminating party in cash by wire transfer in
             immediately available funds to an account designated by the
             terminating party an amount equal to the Expense Fee as payment in
             full of the terminating party's costs and expenses in connection
             with the transactions contemplated by this Agreement.

         (e) If this Agreement is terminated by Duke Energy pursuant to Section
             7.2(f) and at any time after the date of this Agreement and prior
             to such termination a bona fide Acquisition Proposal with respect
             to Westcoast or its subsidiaries shall have been made, or any
             proposal or expression of interest by a third party regarding an
             Acquisition Proposal shall have been publicly disclosed, then (i)
             Westcoast will, within three Business Days following any such
             termination, pay to Duke Energy in cash by wire transfer in
             immediately available funds to an account designated by Duke Energy
             an amount equal to the Expense Fee as payment in full of the Duke
             Energy Parties' costs and expenses in connection with the
             transactions contemplated by this Agreement and (ii) if within 12
             months after the date of such termination, Westcoast enters into
             any agreement for an Acquisition Proposal or consummates a
             transaction that constitutes an Acquisition Proposal, Westcoast
             will, prior to the earlier of consummation of a transaction that
             constitutes an Acquisition Proposal, or execution of a definitive
             agreement with respect thereto, pay to Duke Energy in cash by wire
             transfer in immediately available funds to an account designated by
             Duke Energy, the Termination Fee minus the amount of any payment
             previously made pursuant to clause (i) of this subsection (e).

         (f) If this Agreement is terminated by either party pursuant to Section
             7.2(c) or pursuant to Section 7.2(e)(ii) and within 12 months after
             the date of such termination, Westcoast enters into any agreement
             for an Acquisition Proposal or consummates a transaction that
             constitutes an Acquisition Proposal, Westcoast will, prior to the
             earlier of consummation of a transaction that constitutes an
             Acquisition Proposal, or execution of a definitive agreement with
             respect thereto, pay to Duke Energy in cash by wire transfer in
             immediately available funds to an account designated by Duke
             Energy, the Termination Fee minus any payment previously made
             pursuant to Section 7.3(g).

         (g) If this Agreement is terminated by either party pursuant to Section
             7.2(c) and at the date of such termination any required approval of
             any provincial regulatory body shall not have been obtained then
             Westcoast will, in the case of a termination by Duke Energy, within
             three Business Days following such termination or, in the case of a
             termination


                             COMBINATION AGREEMENT
                                       62
   67


             by Westcoast, prior to such termination, pay to Duke Energy in cash
             by wire transfer in immediately available funds to an account
             designated by Duke Energy an amount equal to the Expense Fee as
             payment in full of the Duke Energy Parties' costs and expenses in
             connection with the transactions contemplated by this Agreement. If
             this Agreement is terminated by either party pursuant to Section
             7.2(c) and at the date of such termination any required approval of
             Duke Energy's performance of its obligations under this Agreement
             by the North Carolina Utilities Commission or The Public Service
             Commission of South Carolina shall not have been obtained, then
             Duke Energy will, in the event of a termination by Westcoast,
             within three Business Days following such termination or in the
             case of a termination by Duke Energy, prior to such termination,
             pay to Westcoast in cash by wire transfer in immediately available
             funds to an account designated by Duke Energy an amount equal to
             the Expense Fee as payment in full of Westcoast's costs and
             expenses in connection with the transactions contemplated by this
             Agreement.

         (h) Solely for purposes of this Section 7.3, (x) each reference to 20%
             in the definition of Acquisition Proposal shall be deemed to be 25%
             and (y) for purposes of determining under Section 7.03(b)(ii)
             whether the condition that an Acquisition Proposal shall have been
             made or a proposal or expression of interest by a third party
             regarding an Acquisition Proposal shall have been made or publicly
             disclosed, the condition shall not be deemed to have been met to
             the extent (i) the Acquisition Proposal is expressly conditioned
             upon completion of the transactions contemplated hereby or (z) the
             proposal or expression of interest regarding an Acquisition
             Proposal that is only publicly disclosed and is not bona fide made.

7.4      EFFECT OF TERMINATION FEE PAYMENT

         For greater certainty, the parties hereto agree that if Westcoast pays
the Termination Fee to Duke Energy pursuant to the provisions of Section 7.3,
Duke Energy shall have no other remedy for any breach of this Agreement by
Westcoast, unless Westcoast makes a claim against Duke Energy for breach of a
provision of this Agreement, in which circumstances the liability of Westcoast
to Duke Energy for damages for claims in respect of breaches of this Agreement
shall be subject to a maximum limit equal to the liability of Duke Energy to
Westcoast for damages for claims in respect of breaches of this Agreement plus
the Termination Fee.



                             COMBINATION AGREEMENT
                                       63
   68


                                    ARTICLE 8

                                     GENERAL

8.1      INVESTIGATION

         Any investigation by a party hereto and its advisors shall not
mitigate, diminish or affect the representations and warranties of any other
party to this Agreement.

8.2      NOTICES

         All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed)
or dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party at:

         (a) If to Westcoast, at:

             1333 West Georgia Street
             Vancouver, British Columbia
             Canada V6E 3K9

             Attention: Senior Vice President,
                        Law and Corporate Secretary

             Telecopier No.: (604) 488-8088

             with a copy to:

             Torys 
             Suite 3000
             Toronto - Dominion Centre
             Toronto, Ontario
             Canada M5K 1N2

             Attention: Peter E. S. Jewett
                        Philip Symmonds

             Telecopier No.: (416) 865-7380

         (b) If to a Duke Energy Party, at:

             Duke Energy Corporation
             422 South Church Street
             Charlotte, NC 28201-1244

             Attention: Martha B. Wyrsch

             Telecopier No.: (303) 605-1605



                             COMBINATION AGREEMENT

                                       64
   69
or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing.

8.3      ASSIGNMENT

         No party hereto may assign this Agreement or any of its rights,
interests or obligations under this Agreement or the Arrangement (whether by
operation of law or otherwise) except that Exchangeco may assign in its sole
discretion, any or all of its rights, interests and obligations hereunder to any
wholly-owned subsidiary of Duke Energy incorporated in Canada.

8.4      BINDING EFFECT

         Subject to Section 8.3, this Agreement and the Arrangement shall be
binding upon, enure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.

8.5      THIRD-PARTY BENEFICIARIES

         Except for the agreement set forth in Section 5.4, nothing in this
Agreement, express or implied, shall be construed to create any third-party
beneficiaries.

8.6      WAIVER AND MODIFICATION

         Westcoast and the Duke Energy Parties may waive or consent to the
modification of, in whole or in part, any inaccuracy of any representation or
warranty made to them hereunder or in any document to be delivered pursuant
hereto and may waive or consent to the modification of any of the covenants or
agreements herein contained for their respective benefit or waive or consent to
the modification of any of the obligations of the other parties hereto. Any
waiver or consent to the modification of any of the provisions of this
Agreement, to be effective, must be in writing executed by the party granting
such waiver or consent.

8.7      NO PERSONAL LIABILITY

         (a) No director or officer of any Duke Energy Party or any of their
             respective subsidiaries shall have any personal liability
             whatsoever to Westcoast under this Agreement, or any other document
             delivered in connection with the Arrangement on behalf of a Duke
             Energy Party.

         (b) No director or officer of Westcoast or any of its subsidiaries
             shall have any personal liability whatsoever to any Duke Energy
             Party under this Agreement, or any other document delivered in
             connection with the Arrangement on behalf of Westcoast.



                                       65
   70


8.8      FURTHER ASSURANCES

         Each party hereto shall, from time to time, and at all times hereafter,
at the request of the other parties hereto, but without further consideration,
do all such further acts and execute and deliver all such further documents and
instruments as shall be reasonably required in order to fully perform and carry
out the terms and intent hereof.

8.9      EXPENSES

         Subject to Section 7.3, the parties agree that all expenses of the
parties relating to this Agreement and the transactions contemplated hereby,
including legal fees, accounting fees, financial advisory fees, regulatory
filing fees, all disbursements of advisors, and printing and mailing costs,
shall be paid by the party incurring such expenses.

8.10     PUBLIC ANNOUNCEMENTS

         The initial press release concerning the Arrangement shall be a joint
press release and thereafter Duke Energy and Westcoast agree to consult with
each other prior to issuing any news releases or public statements with respect
to this Agreement or the Arrangement, and to use their respective reasonable
best efforts not to issue any news releases or public statements inconsistent
with the results of such consultations. Subject to applicable Laws, each party
shall use its reasonable best efforts to enable the other parties to review and
comment on all such news releases prior to the release thereof. The parties
agree to issue jointly a news release with respect to this Arrangement as soon
as practicable following the execution of this Agreement. Duke Energy and
Westcoast also agree to consult with each other in preparing and making any
filings and communications in connection with any Appropriate Regulatory
Approvals.

8.11     GOVERNING LAWS; CONSENT TO JURISDICTION

         This Agreement shall be governed by and construed in accordance with
the Laws of the Province of British Columbia and the Laws of Canada applicable
therein and shall be treated in all respects as a British Columbia contract.
Each party hereby irrevocably attorns to the jurisdiction of the courts of the
Province of British Columbia in respect of all matters arising under or in
relation to this Agreement.

8.12     REMEDIES

         The parties acknowledge and agree that an award of money damages would
be inadequate for any breach of this Agreement by any party or its
representatives and any such breach would cause the non-breaching party
irreparable harm. Accordingly, the parties hereto agree that, in the event of
any breach or threatened breach of this Agreement by one of the parties, the
parties will also be entitled, without the requirement of posting a bond or
other security, to equitable relief, including injunctive relief and specific
performance, provided such party is not in material default hereunder. Such
remedies will not be the exclusive remedies for any breach of this Agreement but
will be in addition to all other remedies available at law or equity to each of
the parties.


                             COMBINATION AGREEMENT

                                       66
   71


8.13     TIME OF ESSENCE

         Time shall be of the essence in this Agreement.

8.14     ENTIRE AGREEMENT

         This Agreement including the disclosure letters, the agreements and
other documents referred to herein constitute the entire agreement among the
parties hereto and supersede all other prior agreements, understandings,
negotiations and discussions, whether oral or written, among the parties hereto
with respect to the matters hereof and thereof.

8.15     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 materially 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
transactions contemplated hereby are fulfilled to the extent possible.

8.16     COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.


                             COMBINATION AGREEMENT

                                       67
   72


         IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the date first written above.

                                      DUKE ENERGY CORPORATION


                                      By: /s/ RICHARD B. PRIORY
                                         ---------------------------------------
                                           Name:  Richard B. Priory
                                           Title: Chairman, President and
                                                  Chief Executive Officer





                                      3058368 NOVA SCOTIA COMPANY


                                      By: /s/ FRED J. FOWLER
                                         ---------------------------------------
                                           Name:  Fred J. Fowler
                                           Title: President





                                      3946509 CANADA INC.


                                      By: /s/ FRED J. FOWLER
                                         ---------------------------------------
                                           Name:  Fred J. Fowler
                                           Title: President



                                      WESTCOAST ENERGY INC.


                                      By: /s/ MICHAEL E.J. PHELPS
                                         ---------------------------------------
                                           Name:  Michael E.J. Phelps
                                           Title: Chairman and Chief Executive
                                                  Officer 

                                      By: /s/ GRAHAM M. WILSON
                                         ---------------------------------------
                                           Name:  Graham M. Wilson
                                           Title: Executive Vice President and
                                                  Chief Financial Officer 


                             COMBINATION AGREEMENT

                                       68
   73
                                   SCHEDULE A

                           FORM OF AFFILIATE'S LETTER


                              _______________, 2001


Duke Energy Corporation
422 South Church Street
Charlotte, North Carolina 28201-1244                           

Ladies and Gentlemen:

         The undersigned acknowledges that as of the date hereof the undersigned
may be deemed to be an "affiliate" of Westcoast Energy Inc., a corporation
existing under the laws of Canada ("Westcoast"), as the term "affiliate" is used
in and for purposes of paragraphs (c) and (d) of Rule 145 ("Rule 145")
promulgated by the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Securities Act"), although nothing
contained herein shall be construed as an admission by the undersigned that the
undersigned is in fact an affiliate of Westcoast. In connection with the
arrangement pursuant to Section 192 of the Canada Business Corporations Act,
R.S.C. 1995, c. C-44 (the "Arrangement") to be entered pursuant to the terms and
subject to the conditions of the Combination Agreement dated as of September 20,
2001 (the "Agreement"), among Westcoast, 3946509 Canada Inc. ("Exchangeco") and
Duke Energy Corporation, a North Carolina corporation ("Duke Energy"), (i) all
of the shares of Westcoast Common Stock issued and outstanding immediately prior
to the time of the effectiveness of the Arrangement (the "Effective Time") will
be exchanged for cash, exchangeable shares of Exchangeco ("Exchangeable
Shares"), shares of common stock, no par value per share, of Duke Energy ("Duke
Energy Common Stock") or some combination of the foregoing, (ii) immediately
after the Effective Time, Duke Energy and its affiliates will own all of the
issued and outstanding shares of common stock of Westcoast ("Westcoast Common
Stock"), (iii) all of the shares of preferred stock of Westcoast ("Westcoast
Preferred Stock") issued and outstanding immediately prior to the Effective Time
will remain outstanding as shares of Westcoast Preferred Stock, and (iv)
unexpired and unexercised options and warrants to purchase Westcoast Common
Stock ("Westcoast Options") will become options to purchase Duke Energy Common
Stock ("Duke Energy Options"). In, or as a result of, the Arrangement, the
undersigned will receive (i) cash, Exchangeable Shares, Duke Energy Common Stock
or some combination of the foregoing, in exchange for all of the shares of
Westcoast Common Stock owned by the undersigned immediately prior to the
Effective Time and/or (ii) Duke Energy Options in exchange for all of the
Westcoast Options owned by the undersigned immediately prior to the Effective
Time (such Exchangeable Shares, shares of Duke Energy Common Stock, Westcoast
Preferred Stock and Westcoast Options collectively referred to herein as
"Securities").

         The undersigned agrees with Duke Energy not to sell, transfer or
otherwise dispose of any Securities issued to the undersigned in the Arrangement
unless (i) such sale, transfer or other disposition is made in conformity with
the requirements of Rule 145(d) promulgated under the Securities Act, (ii) an
authorized representative of the SEC takes a position in writing reasonably
acceptable to Duke Energy to the effect that the SEC would take no action, or
that the staff of the SEC would not recommend that the SEC take action, with
respect to such sale, transfer or other disposition, and a copy of such written
position is delivered to Duke Energy, (iii) the 

   74

undersigned delivers to Duke Energy a written opinion of counsel, reasonably
acceptable to Duke Energy in form and substance, that such sale, transfer or
other disposition is otherwise exempt from registration under the Securities
Act, or (iv) such sale, transfer or disposition occurs after the earlier of (A)
the first anniversary of the Effective Time, provided that, at the time of such
sale, transfer or other disposition, the undersigned is not an affiliate of Duke
Energy, or (B) the date on which the restrictions upon sale, transfer or
disposition under Rule 145 are eliminated pursuant to action of the SEC. The
undersigned understands that Duke Energy will not be required to file or
maintain the effectiveness of any registration statement under the Securities
Act for the purpose of resale of Securities held by the undersigned.

         The undersigned acknowledges and agrees that appropriate restrictive
legends will be placed on certificates representing Securities received by the
undersigned in the Arrangement or held by a transferee thereof and that "stop
transfer" orders may be entered in the records of the transfer agent for
Securities with respect to such shares. Such orders will be removed and such
legends will be removed by delivery of substitute certificates upon receipt of
an opinion in form and substance reasonably satisfactory to Duke Energy from
counsel reasonably satisfactory to Duke Energy to the effect that such legends
are no longer required to assure compliance with applicable provisions of the
Securities Act.

         The undersigned acknowledges that the undersigned has carefully read
this letter and understands the requirements hereof and the limitations imposed
upon the distribution, sale, transfer or other disposition of Securities and the
receipt by Duke Energy of this letter is an inducement to Duke Energy to
consummate the Arrangement.

         Notwithstanding any other provision contained herein, this letter and
all obligations of the undersigned hereunder shall terminate upon the
termination of the Agreement in accordance with its terms.

                                            Very truly yours,



                                            _________________________________
                                            _________________________________
                                            _________________________________


Agreed and accepted this ___ day of ________, 2001

DUKE ENERGY CORPORATION



By:    _____________________________________                       
Name:  _____________________________________                
Title: _____________________________________                  

   75


                                   SCHEDULE B

                        APPROPRIATE REGULATORY APPROVALS

CANADA

         o   receipt of an advance ruling certificate ("ARC") pursuant to
             Section 102 of the Competition Act (Canada) with respect to the
             transactions contemplated by this Agreement or the expiration of
             the waiting period under Part IX of the Competition Act (Canada)
             and receipt of a letter from the Commissioner of Competition
             stating that he does not, at that time, intend to make an
             application under Section 92 of the Competition Act (Canada) with
             respect to the transactions contemplated by this Agreement

         o   determination by the Minister responsible for Investment Canada
             under the Investment Canada Act that the Arrangement is of "net
             benefit to Canada" for purposes of such Act on terms and conditions
             satisfactory to Duke Energy

         o   approval of acquisition by British Columbia Utilities Commission

         o   exemption orders from the provincial or territorial securities
             regulators from the registration and prospectus requirements with
             respect to the Exchangeable Share structure

         o   approval of The Toronto Stock Exchange regarding the conditional
             listing of the Exchangeable Shares

UNITED STATES

         o   expiration or earlier termination of the waiting period under the
             Hart-Scott-Rodino Antitrust Improvements Act of 1976

         o   approval of Federal Energy Regulatory Commission under Section 203
             of the Federal Power Act

         o   SEC order exempting Westcoast's public utility subsidiaries under
             Section 3(b) of the 1935 Act

         o   approval of the North Carolina Utilities Commission and The Public
             Service Commission of South Carolina of Duke Energy's performance
             of its obligations under this Agreement, including the issuance of
             its stock

         o   effectiveness of the registration statement on Form S-3 regarding
             the Duke Energy Common Shares

         o   approval of The New York Stock Exchange regarding the listing of
             the Duke Energy Common Shares subject to official notice of
             issuance


   76
                                   SCHEDULE C

                         FORM OF ARRANGEMENT RESOLUTION


               SPECIAL RESOLUTION OF THE WESTCOAST SECURITYHOLDERS

BE IT RESOLVED THAT:

1.       The arrangement (the "ARRANGEMENT") under Section 192 of the
         Canada Business Corporations Act (the "CBCA") involving Westcoast
         Energy Inc. ("WESTCOAST"), as more particularly described and set forth
         in the Management Proxy Circular (the "CIRCULAr") of Westcoast
         accompanying the notice of this meeting (as the Arrangement may be or
         may have been modified or amended) is hereby authorized, approved and
         adopted.

2.       The Plan of Arrangement (the "PLAN OF ARRANGEMENt") involving
         Westcoast, the full text of which is set out as Schedule E to the
         Combination Agreement made as of September o, 2001 among Duke Energy
         Corporation, 3058368 Nova Scotia Company, 3946509 Canada Inc. and
         Westcoast (the "COMBINATION Agreement") (as the Plan of Arrangement may
         be or may have been modified or amended) is hereby authorized, approved
         and adopted.

3.       Notwithstanding that this resolution has been passed (and the
         Arrangement adopted) by the shareholders and optionholders of Westcoast
         or that the Arrangement has been approved by the Supreme Court of
         British Columbia, the directors of Westcoast are hereby authorized and
         empowered (i) to amend the Combination Agreement or the Plan of
         Arrangement to the extent permitted by the Combination Agreement, and
         (ii) not to proceed with the Arrangement without further approval of
         the shareholders or optionholders of Westcoast, but only if the
         Combination Agreement is terminated in accordance with Article 7
         thereof.

4.       Any officer or director of Westcoast is hereby authorized and
         directed for and on behalf of Westcoast to execute, under the seal of
         Westcoast or otherwise, and to deliver articles of arrangement and such
         other documents as are necessary or desirable to the Director under the
         CBCA in accordance with the Combination Agreement for filing.

5.       Any officer or director of Westcoast is hereby authorized and
         directed for and on behalf of Westcoast to execute or cause to be
         executed, under the seal of Westcoast or otherwise, and to deliver or
         cause to be delivered, all such other documents, agreements and
         instruments and to perform or cause to be performed all such other acts
         and things as in such person's opinion may be necessary or desirable to
         give full effect to the foregoing resolution and the matters authorized
         hereby, such determination to be conclusively evidenced by the
         execution and delivery of any such documents, agreements or instruments
         and the taking of any such actions.


   77
                                   SCHEDULE D

                FORM OF WESTCOAST RIGHTS PLAN WAIVER RESOLUTION



ORDINARY RESOLUTION OF THE WESTCOAST SHAREHOLDERS

BE IT RESOLVED THAT:

1.       The supplement to the Shareholder Protection Rights Plan Agreement (the
         "RIGHTS PLAN") dated as of April 26, 2000 between Westcoast Energy Inc.
         ("WESTCOAST") and Montreal Trust Company of Canada that waives the
         application of Section 3.1 of the Rights Plan to any Flip-in Event (as
         that term is defined in the Rights Plan) that may occur as a result of
         entering into, and/or the actions taken pursuant to, the Combination
         Agreement (the "COMBINATION AGREEMENT") dated as of September 20, 2001
         among Duke Energy Corporation, 3058368 Nova Scotia Company, 3946509
         Canada Inc. and Westcoast and the Plan of Arrangement attached to the
         Combination Agreement as Schedule E is hereby authorized, adopted and
         approved pursuant to Section 5.4(d) of the Rights Plan.

2.       Any officer or director of Westcoast is hereby authorized and directed
         for and on behalf of Westcoast to execute or cause to be executed,
         under the seal of Westcoast or otherwise, and to deliver or cause to be
         delivered, all such other documents, agreements and instruments and to
         perform or cause to be performed all such other acts and things as in
         such person's opinion may be necessary or desirable to give full effect
         to the foregoing resolution and the matters authorized hereby, such
         determination to be conclusively evidenced by the execution and
         delivery of any such documents, agreements or instruments and the
         taking of any such actions.

   78
                                   SCHEDULE E

                          FORM OF PLAN OF ARRANGEMENT

                               PLAN OF ARRANGEMENT
                                UNDER SECTION 192
                     OF THE CANADA BUSINESS CORPORATIONS ACT


                                   ARTICLE 1

                                 INTERPRETATION

1.1      DEFINITIONS

         In this Plan of Arrangement, unless there is something in the subject
matter or context inconsistent therewith, the following terms shall have the
respective meanings set out below (and grammatical variations of such terms
shall have corresponding meanings):

         "AFFILIATE" has the meaning ascribed thereto in the Securities Act,
         unless otherwise expressly stated herein;

         "AGGREGATE AMOUNT OF CASH ELECTED" means the aggregate amount of cash
         that would be payable to holders of Westcoast Common Shares based upon
         the elections made pursuant to Section 2.2(a) before giving effect to
         the proration provisions of Section 2.2(d);

         "AGGREGATE NUMBER OF SHARES ELECTED" means the aggregate number of
         Exchangeable Shares and Duke Energy Common Shares that would be
         issuable to holders of Westcoast Common Shares based upon the elections
         made pursuant to Section 2.2(a) before giving effect to the proration
         provisions of Section 2.2(d);

         "ANCILLARY RIGHTS" means the interest of a holder of Westcoast Common
         Shares who elects or is deemed to have elected to receive Exchangeable
         Shares as a beneficiary of the trust created under the Voting and
         Exchange Trust Agreement;

         "ARRANGEMENT" means the arrangement under section 192 of the CBCA on
         the terms and subject to the conditions set out in this Plan of
         Arrangement, subject to any amendments or variations thereto made in
         accordance with Section 7.1 of the Combination Agreement or Article 6
         or made at the direction of the Court in the Final Order;

         "ARRANGEMENT RESOLUTION" means the special resolution of the Westcoast
         Securityholders, to be substantially in the form and content of
         Schedule C annexed to the Combination Agreement;

         "ARTICLES OF ARRANGEMENT" means the articles of arrangement of
         Westcoast in respect of the Arrangement that are required by the CBCA
         to be filed with the Director after the Final Order is made;

         "BUSINESS DAY" means any day on which commercial banks are generally
         open for business in New York, New York and Vancouver, British
         Columbia, other than a 


                                      -1-

                              PLAN OF ARRANGEMENT

   79
         Saturday, a Sunday or a day observed as a holiday in New York, New York
         under the laws of the State of New York or the federal laws of the
         United States of America or in Vancouver, British Columbia under the
         laws of the Province of British Columbia or the federal laws of Canada;

         "CALLCO" means 3058368 Nova Scotia Company, an unlimited liability
         company existing under the laws of the Province of Nova Scotia which,
         at the Effective Time, will be an indirect wholly-owned subsidiary of
         Duke Energy;

         "CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount expressed
         in a currency other than Canadian dollars (the "FOREIGN CURRENCY
         AMOUNT") at any date, the product obtained by multiplying:

                  (a) the Foreign Currency Amount, by

                  (b) the noon spot rate of exchange on such date for such
         foreign currency expressed in Canadian dollars as reported by The Bank
         of Canada or, in the event such spot rate of exchange is not available,
         such spot rate of exchange on such date for such foreign currency
         expressed in Canadian dollars as may be deemed by the Board of
         Directors of Duke Energy to be appropriate for such purpose (the
         "CURRENCY EXCHANGE RATE");

         "CANADIAN RESIDENT" means a resident of Canada for purposes of the ITA;

         "CASH AVAILABLE" means the Maximum Cash Consideration less the product
         of (a) the number of Westcoast Common Shares held by Dissenting
         Shareholders as of the Effective Time, if any and (b) Cdn$43.80;

         "CASH ELECTION" has the meaning ascribed thereto in Section 2.2(a);

         "CBCA" means the Canada Business Corporations Act, as amended from time
         to time prior to the Effective Date;

         "CCRA" means Canada Customs and Revenue Agency;

         "CERTIFICATE" means the certificate of arrangement giving effect to the
         Arrangement, issued by the Director pursuant to subsection 192(7) of
         the CBCA after the Articles of Arrangement have been filed with the
         Director;

         "CIRCULAR" means the notice of the Westcoast Meeting and accompanying
         management proxy circular, including all appendices thereto, to be sent
         to Westcoast Securityholders in connection with the Westcoast Meeting;

         "COMBINATION AGREEMENT" means the agreement made as of the 20th day of
         September, 2001 among Duke Energy, Callco, Exchangeco and Westcoast, as
         amended, supplemented and/or restated in accordance therewith prior to
         the Effective Date, providing for, among other things, the Arrangement;


                                      -2-

                              PLAN OF ARRANGEMENT
   80
         "COURT" means the Supreme Court of British Columbia;

         "DEPOSITARY" means ____________ Trust Company of Canada at its offices
         set out in the Letter of Transmittal and Election Form;

         "DIRECTOR" means the Director appointed pursuant to section 260 of the
         CBCA;

         "DISSENT RIGHTS" has the meaning ascribed thereto in Section 3.1;

         "DISSENTING SHAREHOLDER" means a holder of Westcoast Common Shares who
         dissents in respect of the Arrangement in strict compliance with the
         Dissent Rights;

         "DROP DEAD DATE" means the twelve month anniversary of the date of the
         Combination Agreement, or such other date as may be agreed by the
         parties to the Combination Agreement;

         "DUKE ENERGY" means Duke Energy Corporation, a corporation existing
         under the laws of the State of North Carolina;

         "DUKE ENERGY AVERAGE PRICE" means 1.54 multiplied by the Weighted
         Average Trading Price of the Duke Energy Common Shares, with such
         product being expressed to the fourth decimal point. The "Weighted
         Average Trading Price of the Duke Energy Common Shares" shall be an
         amount determined by dividing the aggregate sale price of all Duke
         Energy Common Shares sold on the NYSE during the period of 20
         consecutive trading days ending on the day that is two Business Days
         prior to the Election Deadline by the total number of Duke Energy
         Common Shares sold on the NYSE during such period (as reported by
         Bloomberg) expressed to the fourth decimal point;

         "DUKE ENERGY COMMON SHARES" means the shares of common stock, no par
         value per share, in the capital of Duke Energy and any other securities
         into which such shares may be changed; and

         "DUKE ENERGY CONTROL TRANSACTION" has the meaning ascribed thereto in
         the Exchangeable Share Provisions.

         "EFFECTIVE DATE" means the date shown on the Certificate, provided that
         such date occurs on or prior to the Drop Dead Date;

         "EFFECTIVE TIME" means 12:01 a.m. (Vancouver time) on the Effective
         Date;

         "ELECTED" means elected in a duly completed Letter of Transmittal and
         Election Form deposited with the Depositary no later than the Election
         Deadline and, except where the term "election" is used with respect to
         elections and election forms under the ITA and provincial tax law,
         "ELECTS" and "ELECTION" shall have corresponding meanings;

         "ELECTION DEADLINE" means 5:00 p.m. (local time) at the place of
         deposit on the date that is two Business Days prior to the Effective
         Date;


                                      -3-

                              PLAN OF ARRANGEMENT
   81
         "EXCHANGECO" means 3946509 Canada Inc., a corporation existing under
         the laws of Canada and being a direct wholly-owned subsidiary of
         Callco;

         "EXCHANGE RATIO" means, subject to adjustment, if any, as provided in
         Section 2.4, the number, calculated to four decimal places, equal to
         Cdn$43.80 divided by the Duke Energy Average Price; provided that if
         the Weighted Average Trading Price of Duke Energy Common Shares is
         equal to or less than $36.88, the Exchange Ratio shall be 0.7711 and
         further, provided that if the Weighted Average Trading Price of Duke
         Energy Common Shares is equal to or greater than $46.48 the Exchange
         Ratio shall be 0.6119;

         "EXCHANGEABLE SHARE CONSIDERATION" has the meaning ascribed thereto in
         the Exchangeable Share Provisions;

         "EXCHANGEABLE SHARE PRICE" has the meaning ascribed thereto in the
         Exchangeable Share Provisions;

         "EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
         restrictions and conditions attaching to the Exchangeable Shares, which
         rights, privileges, restrictions and conditions shall be substantially
         as set out in Appendix 1 hereto;

         "EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
         capital of Exchangeco, having the rights, privileges, restrictions and
         conditions set out in the Exchangeable Share Provisions;

         "FINAL ORDER" means the final order of the Court approving the
         Arrangement as such order may be amended by the Court at any time prior
         to the Effective Date or, if appealed, then, unless such appeal is
         withdrawn or denied, as affirmed;

         "FIRST PREFERRED SHARES" means the first preferred shares in the
         capital of Westcoast, including each series thereof designated and
         outstanding;

         "GOVERNMENTAL ENTITY" means any (a) multinational, federal, provincial,
         territorial, state, regional, municipal, local or other government,
         governmental or public department, central bank, court, tribunal,
         arbitral body, commission, board, bureau or agency, domestic or
         foreign, (b) subdivision, agent, commission, board, or authority of any
         of the foregoing, or (c) quasi-governmental or private body exercising
         any regulatory, expropriation or taxing authority under or for the
         account of any of the foregoing;

         "HOLDERS" means, when used with reference to the Westcoast Common
         Shares, the holders of Westcoast Common Shares shown from time to time
         in the register maintained by or on behalf of Westcoast in respect of
         the Westcoast Common Shares and, when used with reference to the
         Exchangeable Shares, the holders of Exchangeable Shares shown from time
         to time in the register maintained by or on behalf of Exchangeco in
         respect of the Exchangeable Shares and, when used with reference to the
         Westcoast Options, the Persons to whom such options were issued;


                                      -4-

                              PLAN OF ARRANGEMENT
   82
         "INTERIM ORDER" means the interim order of the Court, as the same may
         be amended, in respect of the Arrangement, as contemplated by Section
         2.3 of the Combination Agreement;

         "ITA" means the Income Tax Act (Canada), as amended;

         "LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of
         transmittal and election form provided for use by holders of Westcoast
         Common Shares, in the form accompanying the Circular;

         "LIQUIDATION AMOUNT" has the meaning ascribed thereto in the
         Exchangeable Share Provisions;

         "LIQUIDATION CALL PURCHASE PRICE" has the meaning ascribed thereto in
         Section 5.1(a);

         "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in Section
         5.1(a);

         "LIQUIDATION DATE" has the meaning ascribed thereto in the Exchangeable
         Share Provisions;

         "MAXIMUM CASH CONSIDERATION" means the amount equal to Cdn$21.90 times
         the aggregate number of Westcoast Common Shares immediately prior to
         the Effective Time (other than Westcoast Common Shares held by Duke
         Energy or any affiliate thereof);

         "MAXIMUM NUMBER OF DUKE ENERGY COMMON SHARES" means the number equal to
         the number of Shares Available multiplied by the aggregate number of
         Duke Energy Common Shares that would be issuable to holders of
         Westcoast Common Shares based upon the elections made pursuant to
         Section 2.2(a) before giving effect to the proration provisions of
         Section 2.2(d), divided by the Aggregate Number of Shares Elected;

         "MAXIMUM NUMBER OF EXCHANGEABLE SHARES" means the number equal to the
         number of Shares Available multiplied by the aggregate number of
         Exchangeable Shares that would be issuable to holders of Westcoast
         Common Shares based upon the elections made pursuant to Section 2.2(a)
         before giving effect to the proration provisions of Section 2.2(d),
         divided by the Aggregate Number of Shares Elected;

         "MIXED ELECTION" has the meaning ascribed thereto in Section 2.2(a);

         "NON-ELECTION CASH AMOUNT" has the meaning ascribed thereto in Section
         2.2(b);

         "NON-ELECTION SHARES" has the meaning ascribed thereto in Section
         2.2(b);

         "NYSE" means The New York Stock Exchange, Inc.;

         "PERSON" includes any individual, firm, partnership, joint venture,
         venture capital fund, limited liability company, unlimited liability
         company, association, trust, trustee, executor, administrator, legal
         personal representative, estate, group, body corporate, 


                                      -5-

                              PLAN OF ARRANGEMENT
   83
         corporation, unincorporated association or organization, Governmental
         Entity, syndicate or other entity, whether or not having legal status;

         "REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
         Section 5.2(a);

         "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in Section
         5.2(a);

         "REDEMPTION DATE" has the meaning ascribed thereto in the Exchangeable
         Share Provisions;

         "REDEMPTION PRICE" has the meaning ascribed thereto in the Exchangeable
         Share Provisions;

         "REPLACEMENT OPTION" has the meaning ascribed thereto in Section
         2.2(f);

         "SECURITIES ACT" means the Securities Act (Ontario) and the rules,
         regulations and policies made thereunder, as now in effect and as they
         may be amended from time to time prior to the Effective Date;

         "SHARES AVAILABLE" means the product, rounded down to the nearest whole
         number, of the Exchange Ratio multiplied by the aggregate number of
         Westcoast Common Shares immediately prior to the Effective Time (other
         than Westcoast Common Shares held by Duke Energy or any affiliate
         thereof), divided by 2;

         "TRANSFER AGENT" has the meaning ascribed thereto in Section 5.1(b);

         "TRUSTEE" means the trustee to be chosen by Duke Energy and Westcoast,
         acting reasonably, to act as trustee under the Voting and Exchange
         Trust Agreement, being a corporation organized and existing under the
         laws of the State of New York or the State of Delaware, and any
         successor trustee appointed under the Voting and Exchange Trust

         Agreement;

         "VOTING AND EXCHANGE TRUST AGREEMENT" means an agreement to be made
         between Duke Energy, Exchangeco and the Trustee in connection with the
         Plan of Arrangement substantially in the form of Schedule G annexed to
         the Combination Agreement, with such changes thereto as the parties to
         the Combination Agreement, acting reasonably, may agree;

         "WESTCOAST" means Westcoast Energy Inc., a corporation existing under
         the laws of Canada;

         "WESTCOAST COMMON SHARES" means the issued and outstanding common
         shares in the capital of Westcoast immediately prior to the Effective
         Time;

         "WESTCOAST MEETING" means the special meeting of Westcoast
         Securityholders, including any adjournment, adjournments, postponement
         or postponements thereof, to be called and held in accordance with the
         Interim Order to consider the Arrangement and the Westcoast Rights Plan
         Waiver Resolution;


                                      -6-

                              PLAN OF ARRANGEMENT
   84
         "WESTCOAST OPTIONS" means all Westcoast Common Share purchase options
         granted under the Westcoast Stock Option Plans;

         "WESTCOAST RIGHTS PLAN WAIVER RESOLUTION" means the ordinary resolution
         of the holders of Westcoast Common Shares to be substantially in the
         form and content of Schedule D annexed to the Combination Agreement;

         "WESTCOAST SECURITYHOLDERS" means the holders of Westcoast Common
         Shares and the holders of Westcoast Options, collectively;

         "WESTCOAST STOCK OPTION PLANS" means Westcoast's Long-Term Incentive
         Share Option Plan 1989 as amended effective April 26, 2000 and
         Westcoast's 1999 Key Employee Plan;

         1.2 INTERPRETATIONS NOT AFFECTED BY HEADINGS

         The division of this Plan of Arrangement into articles, sections and
other portions and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation hereof. Unless
otherwise indicated, all references to an "Article" or "Section" followed by a
number refer to the specified Article or Section of this Plan of Arrangement.
The terms "this Plan of Arrangement," "hereof," "herein" and "hereunder" and
similar expressions refer to this Plan of Arrangement and not to any particular
Article, Section or other portion hereof.

         1.3 RULES OF CONSTRUCTION

         Unless otherwise specifically indicated or the context otherwise
requires, (a) all references to "dollars" or "$" mean United States dollars, (b)
words importing the singular shall include the plural and vice versa and words
importing any gender shall include all genders, and (c) "include," "includes"
and "including" shall be deemed to be followed by the words "without
limitation."

         1.4 DATE FOR ANY ACTION

         In the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such action shall
be required to be taken on the next succeeding day that is a Business Day.

                                    ARTICLE 2

                                   ARRANGEMENT

         2.1 BINDING EFFECT

         This Plan of Arrangement will become effective at, and be binding at
and after, the Effective Time on (i) Westcoast, (ii) Duke Energy, Callco and
Exchangeco, (iii) all holders and all beneficial owners of Westcoast Common
Shares, (iv) all holders and all beneficial owners of Exchangeable Shares, and
(v) all holders and all beneficial owners of Westcoast Options.


                                      -7-

                              PLAN OF ARRANGEMENT
   85
         2.2 ARRANGEMENT

         Commencing at the Effective Time, the following shall occur and shall
be deemed to occur without any further act or formality:

               (a) Subject to the proration adjustments set forth in Section
2.2(d), each Westcoast Common Share that is not held by (i) a Dissenting
Shareholder who is ultimately entitled to be paid the fair value of the
Westcoast Common Shares held by such Dissenting Shareholder or (ii) Duke Energy
or any affiliate thereof (which shall not be exchanged under the Arrangement and
shall remain outstanding as a Westcoast Common Share held by Duke Energy or any
affiliate thereof), will be transferred to, and acquired by, Exchangeco, without
any act or formality on the part of the holder of such Westcoast Common Share or
Exchangeco, free and clear of all liens, claims and encumbrances in exchange
for, at the holder's election (or deemed election), (w) Cdn$43.80 in cash
without interest (a "CASH ELECTION"); or (x) such number of fully paid and
non-assessable Exchangeable Shares (and the Ancillary Rights) as is equal to the
Exchange Ratio; or (y) such number of fully paid and non-assessable Duke Energy
Common Shares as is equal to the Exchange Ratio; or (z) a combination of the
foregoing, with the aggregate value of the cash portion to be less than
Cdn$43.80 and the total number of Exchangeable Shares and/or Duke Energy Common
Shares (if any) determined in accordance with Section 2.2(d) (a "MIXED
ELECTION"), payable, in each case, in accordance with Article 4, and the name of
each such holder of Westcoast Common Shares will be removed from the register of
holders of Westcoast Common Shares and added to the register of holders of the
Exchangeable Shares or Duke Energy Common Shares, as the case may be, if any,
comprising all or part of the consideration to be received by such holder for
such transfer, and Exchangeco will be recorded as the registered holder of such
Westcoast Common Shares so exchanged and will be deemed to be the legal and
beneficial owner thereof; provided, however, that holders of Westcoast Common
Shares who are not Canadian Residents will not be entitled to elect or be deemed
to have elected to receive Exchangeable Shares (and the Ancillary Rights), and
any such election or deemed election otherwise made by any such holder shall be
deemed to be an election to receive Duke Energy Common Shares.

               (b) After application of the proration provisions in Section
2.2(d) to all Westcoast Common Shares in respect of which an election has been
made by the holder thereof in accordance with Section 2.2(a), each Westcoast
Common Share in respect of which no election has been made by the holder
thereof, or in respect of which an effective election has not been made (other
than Westcoast Common Shares held by (i) a Dissenting Shareholder who is
ultimately entitled to be paid the fair value of the Westcoast Common Shares
held by such Dissenting Shareholder and (ii) Duke Energy or any affiliate
thereof (which shall not be exchanged under the Arrangement and shall remain
outstanding as a Westcoast Common Share held by Duke Energy or any affiliate
thereof)) ("NON-ELECTION SHARES") will be transferred to, and acquired by,
Exchangeco, without any act or formality on the part of the holder of such
Westcoast Common Share or Exchangeco, free and clear of all liens, claims and
encumbrances, and the holder shall be deemed to have elected to receive in
exchange therefor (x) if the Aggregate Amount of Cash Elected equals or exceeds
the Cash Available, such number of fully paid and non-assessable Exchangeable
Shares (and the Ancillary Rights) if such holder is a Canadian Resident (or such
number of fully paid and non-assessable Duke Energy Common 


                                      -8-

                              PLAN OF ARRANGEMENT
   86
Shares if such holder is not a Canadian Resident) as is equal to the Exchange
Ratio, (y) if the Aggregate Number of Shares Elected equals or exceeds the
Shares Available, Cdn$43.80 in cash, without interest, or (z) if neither Clause
(x) or (y) is applicable, (1) an amount of cash, without interest, equal to (A)
the Cash Available minus the Aggregate Amount of Cash Elected divided by (B) the
number of outstanding Non-Election Shares (the "NON-ELECTION CASH AMOUNT") and
(2) the number of Exchangeable Shares (and the Ancillary Rights) if such holder
is a Canadian Resident (or the number of Duke Energy Common Shares if such
holder is not a Canadian Resident) as is equal to (A) the Exchange Ratio
multiplied by (B) a fraction the numerator of which is Cdn$43.80 minus the
Non-Election Cash Amount and the denominator of which is Cdn$43.80, in all such
cases payable in accordance with Article 4, and the name of each such holder of
Westcoast Common Shares will be removed from the register of holders of
Westcoast Common Shares and added to the register of holders of the Exchangeable
Shares or Duke Energy Common Shares, as the case may be, if any, comprising all
or part of the consideration to be received by such holder for such transfer,
and Exchangeco will be recorded as the registered holder of such Westcoast
Common Shares so exchanged and will be deemed to be the legal and beneficial
owner of such Westcoast Common Shares.

               (c) For greater certainty, a pro rata portion of the total number
of Exchangeable Shares, the total amount of cash, and the total number of Duke
Energy Common Shares received under the Arrangement by any particular holder
will be allocated to every Westcoast Common Share held by that holder at the
Effective Time, so that such holder will receive for each Westcoast Common Share
held by the holder at the Effective Time the same combination of Exchangeable
Shares, cash and/or Duke Energy Common Shares as is received for every other
Westcoast Common Share held by that holder at the Effective Time.
Notwithstanding any provisions of this Plan of Arrangement, of the aggregate
consideration to be received by the holders of Westcoast Common Shares, 50% will
consist of cash and 50% will consist of Exchangeable Shares and/or Duke Energy
Common Shares, subject to the effects of Dissenting Shareholders pursuant to
Section 3.1.

               (d) The consideration which each holder of Westcoast Common
Shares has elected in accordance with Section 2.2(a) to receive in exchange for
such holder's Westcoast Common Shares shall be subject to adjustment and
proration on the following bases:

                    (i) if the Aggregate Amount of Cash Elected exceeds the Cash
Available, then the amount of cash payable under the Arrangement to each holder
of Westcoast Common Shares who has made a Cash Election or a Mixed Election
shall be prorated (based on the fraction equal to the Cash Available divided by
the Aggregate Amount of Cash Elected) among all such holders of Westcoast Common
Shares who made a Cash Election or a Mixed Election so that the aggregate amount
of cash payable to all such holders of Westcoast Common Shares who made a Cash
Election or a Mixed Election shall be equal to the Cash Available and each such
holder of Westcoast Common Shares who made a Cash Election or a Mixed Election
shall be entitled to receive cash equal to the amount of cash payable to such
holder of Westcoast Common Shares after giving effect to the proration
provisions of this Section 2.2(d)(i) and (x) if such holder of Westcoast Common
Shares has made a further election to receive Exchangeable Shares or Duke Energy
Common Shares in such event, then such holder shall be deemed to have elected to
receive the number of Exchangeable Shares per Westcoast Common Share equal to
the Exchange Ratio or the number of Duke Energy Common Shares per Westcoast
Common Share 


                                      -9-

                              PLAN OF ARRANGEMENT
   87
equal to the Exchange Ratio, as the case may be, in respect of the balance of
such holder's Westcoast Common Shares in respect of which cash was elected but
not available, or (y) if such holder shall not have made a valid further
election to receive Exchangeable Shares or Duke Energy Common Shares, (A) if
such holder is a Canadian Resident, such holder shall be deemed to have elected
to receive the number of Exchangeable Shares per Westcoast Common Share equal to
the Exchange Ratio in respect of the balance of such holder's Westcoast Common
Shares in respect of which cash was elected but not available and (B) if such
holder is not a Canadian Resident, such holder shall be deemed to have elected
to receive the number of Duke Energy Common Shares per Westcoast Common Share
equal to the Exchange Ratio in respect of the balance of such holder's Westcoast
Common Shares in respect of which cash was elected but not available; and

                    (ii) if the Aggregate Number of Shares Elected exceeds the
Shares Available, then (x) the number of Exchangeable Shares issuable under the
Arrangement to each holder of Westcoast Common Shares who has elected to receive
all or part of the consideration for such holder's Westcoast Common Shares in
the form of Exchangeable Shares shall be prorated (based on the fraction equal
to the Maximum Number of Exchangeable Shares divided by the aggregate number of
Exchangeable Shares that would be issuable to holders of Westcoast Common Shares
based upon the elections made pursuant to Section 2.2(a) before giving effect to
the proration provisions of this Section 2.2(d)) among all holders who have
elected to receive all or part of the consideration for their Westcoast Common
Shares in the form of Exchangeable Shares so that the number of Exchangeable
Shares issuable to all holders who have elected to receive all or part of the
consideration for their Westcoast Common Shares in the form of Exchangeable
Shares under the Arrangement shall be equal to the Maximum Number of
Exchangeable Shares and each such holder shall be entitled to receive that
number of Exchangeable Shares that is equal to the number of Exchangeable Shares
issuable to such holder, after giving effect to the proration provisions of this
Section 2.2(d)(ii)(x), and an amount of cash, without interest, equal to (A) the
difference between the number of Exchangeable Shares such holder elected to
receive pursuant to Section 2.2(a) and the number of Exchangeable Shares such
holder will be entitled to receive after giving effect to the proration
provisions of this Section 2.2(d)(ii)(x), divided by (B) the Exchange Ratio, and
multiplied by (C) Cdn$43.80; and (y) the number of Duke Energy Common Shares
issuable under the Arrangement to each holder of Westcoast Common Shares who has
elected (or is deemed to have elected) to receive all or part of the
consideration for such holder's Westcoast Common Shares, as the case may be, in
the form of Duke Energy Common Shares shall be prorated (based on the fraction
equal to the Maximum Number of Duke Energy Common Shares divided by the
aggregate number of Duke Energy Common Shares that would be issuable to holders
of Westcoast Common Shares based upon the elections made pursuant to Section
2.2(a) before giving effect to the proration provisions of this Section 2.2(d))
among all holders who have elected to receive all or part of the consideration
for their Westcoast Common Shares in the form of Duke Energy Common Shares so
that the number of Duke Energy Common Shares issuable to all holders who have
elected to receive all or part of the consideration for their Westcoast Common
Shares in the form of Duke Energy Common Shares under the Arrangement shall be
equal to the Maximum Number of Duke Energy Common Shares and each such holder
shall be entitled to receive that number of Duke Energy Common Shares that is
equal to the number of Duke Energy Common Shares issuable to such holder, after
giving effect to the proration provisions of this Section 2.2(d)(ii)(y), and an


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amount of cash, without interest, equal to (A) the difference between the number
of Duke Energy Common Shares such holder elected (or is deemed to have elected)
to receive pursuant to Section 2.2(a) and the number of Duke Energy Common
Shares such holder will be entitled to receive after giving effect to the
proration provisions of this Section 2.2(d)(ii)(y), divided by (B) the Exchange
Ratio, and multiplied by (C) Cdn$43.80.

               (e) Each of the outstanding First Preferred Shares shall remain
outstanding in accordance with its terms.

               (f) Each Westcoast Option that has not been duly exercised prior
to the Effective Time shall be exchanged for or converted into an option (a
"REPLACEMENT OPTION") to purchase that number of Duke Energy Common Shares equal
to the number of Westcoast Common Shares subject to such Westcoast Option
multiplied by the Exchange Ratio. Such Replacement Option shall provide for an
exercise price per Duke Energy Common Share equal to (x) the exercise price per
Westcoast Common Share of such Westcoast Option immediately prior to the
Effective Time divided by the Exchange Ratio, divided by (y) the Currency
Exchange Rate for United States dollars on the Effective Date, provided that in
no circumstance shall the exercise price per Duke Energy Common Share be less
than $.01 and if the calculation results in an exercise price less than $.01,
the exercise price shall be deemed to be $.01 per Duke Energy Common Share. If
the foregoing calculation results in a Replacement Option being exercisable for
a fraction of a Duke Energy Common Share, then the number of Duke Energy Common
Shares subject to such Replacement Option shall be rounded down to the next
whole number of Duke Energy Common Shares and the total exercise price for the
Replacement Option shall be reduced by the exercise price of the fractional Duke
Energy Common Share, provided that in no circumstance shall the exercise price
per Duke Energy Common Share be less than $.01 and if the calculation results in
an exercise price less than $.01, the exercise price shall be deemed to be $.01
per Duke Energy Common Share. The term to expiry, conditions to and manner of
exercising, vesting schedule and all other terms and conditions of such
Replacement Option will be the same as the terms and conditions of such
Westcoast Option, and any document or agreement previously evidencing such
Westcoast Option shall thereafter evidence and be deemed to evidence such
Replacement Options. Notwithstanding the foregoing, the holder of a Westcoast
Option may, at his or her sole option, notify Duke Energy in writing on or
before the Effective Time that he or she wishes to increase the exercise price
per Duke Energy Common Share for his or her Replacement Option in the event that
the value of such Replacement Option immediately after the Effective Time
(measured as the difference between the closing price of the Duke Energy Common
Shares on the NYSE on the Effective Date and the exercise price for such shares
pursuant to such Replacement Option) exceeds the value of the Westcoast Option
immediately before the Effective Time (measured as (x) the difference between
the closing price of the Westcoast Common Shares underlying such Westcoast
Option on The Toronto Stock Exchange on the trading day immediately preceding
the Effective Date and the exercise price for such shares pursuant to such
Westcoast Option, divided by (y) the Currency Exchange Rate for United States
dollars on the Effective Date) to the amount necessary to make the value of such
Replacement Option immediately after the Effective Time equal to the value of
such Westcoast Option immediately before the Effective Time and in the event
such notice is given, the exercise price per Duke Energy Common Share under such
Replacement 


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Option shall be deemed to be equal to such amount; provided that in no
circumstances shall the exercise price per Duke Energy Common Share be less than
$.01.

         2.3 ELECTIONS

               (a) Each Person who, at or prior to the Election Deadline, is a
holder of record of Westcoast Common Shares will be entitled, with respect to
all or a portion of their shares, to make an election at or prior to the
Election Deadline to receive (i) cash, (ii) Exchangeable Shares (and the
Ancillary Rights), (iii) Duke Energy Common Shares, or (iv) a combination
thereof, in exchange for such holder's Westcoast Common Shares on the basis set
forth herein and in the Letter of Transmittal and Election Form; provided that,
notwithstanding anything to the contrary herein, a holder of Westcoast Common
Shares who is not a Canadian Resident will not be entitled to elect to receive
Exchangeable Shares (and the Ancillary Rights) and any such election otherwise
made by any such holder shall be and be deemed to be an election to receive Duke
Energy Common Shares.

               (b) Holders of Westcoast Common Shares who are Canadian
Residents, other than any such holder who is exempt from tax under the ITA, and
who have elected (or who are deemed to have elected) to receive Exchangeable
Shares (and the Ancillary Rights) shall be entitled to make an income tax
election pursuant to subsection 85(1) of the ITA or, if the holder is a
partnership, subsection 85(2) of the ITA (and in each case, where applicable,
the analogous provisions of provincial income tax law) with respect to the
transfer of their Westcoast Common Shares to Exchangeco by providing two signed
copies of the necessary prescribed election forms to the Depositary within 90
days following the Effective Date, duly completed with the details of the number
of Westcoast Common Shares transferred and the applicable agreed amounts for the
purposes of such elections. Thereafter, subject to the election forms being
correct and complete and complying with the provisions of the ITA (or any
applicable provincial income tax law), the forms will be signed by Exchangeco
and returned to such holders of Westcoast Common Shares within 30 days after the
receipt thereof by the Depositary for filing with CCRA (or the applicable
provincial taxing authority). Exchangeco will not be responsible for the proper
completion of any election form and, except for Exchangeco's obligation to
return duly completed election forms which are received by the Depositary within
90 days following the Effective Date, within 30 days after the receipt thereof
by the Depositary, Exchangeco will not be responsible for any taxes, interest,
penalties or any other costs or damages resulting from the failure by a holder
of Westcoast Common Shares to properly complete or file the election forms in
the form and manner and within the time prescribed by the ITA (or any applicable
provincial income tax law). In its sole discretion, Exchangeco may choose to
sign and return an election form received more than 90 days following the
Effective Date, but Exchangeco will have no obligation to do so.

         2.4 ADJUSTMENTS TO EXCHANGE RATIO

         The Exchange Ratio, including the minimum and maximum Exchange Ratio
used in the calculation thereof, shall be proportionately and appropriately
adjusted to reflect fully the effect of (a) any stock split, reverse split,
stock dividend (including any dividend or distribution of securities convertible
into Duke Energy Common Shares or Westcoast Common Shares), reorganization,
recapitalization or other like change with respect to Duke Energy Common Shares
or Westcoast Common Shares and (b) any extraordinary dividend or distribution
with 


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                              PLAN OF ARRANGEMENT
   90
respect to Duke Energy Common Shares (other than a dividend or distribution
referenced in clause (a)), but only if the Weighted Average Trading Price of
Duke Energy Common Shares is less than $36.88 as of the Effective Date, in each
case of clause (a) or (b) the record date for which occurs after the date of the
Combination Agreement and prior to the Effective Time. Regular quarterly cash
dividends and increases therein shall not be considered extraordinary for
purposes of the preceding sentence.

                                    ARTICLE 3

                                RIGHTS OF DISSENT

         3.1 RIGHTS OF DISSENT

         Holders of Westcoast Common Shares may exercise rights of dissent with
respect to such Westcoast Common Shares pursuant to and in the manner set forth
in section 190 of the CBCA as modified by the Interim Order and this Section 3.1
(the "DISSENT RIGHTS") in connection with the Arrangement; provided that,
notwithstanding subsection 190(5) of the CBCA, the written objection to the
Arrangement Resolution referred to in subsection 190(5) of the CBCA must be
received by Westcoast not later than 2:00 p.m. (Vancouver time) on the Business
Day preceding the Westcoast Meeting. Holders of Westcoast Common Shares who duly
exercise such rights of dissent and who:

               (a) are ultimately determined to be entitled to be paid fair
value for their Westcoast Common Shares shall be deemed to have transferred such
Westcoast Common Shares as of the Effective Time, without any further act or
formality and free and clear of all liens, claims and encumbrances, to
Exchangeco, in consideration for a payment of cash from Exchangeco equal to such
fair value; or

               (b) are ultimately determined not to be entitled, for any reason,
to be paid fair value for their Westcoast Common Shares, shall be deemed to have
participated in the Arrangement, as of the Effective Time, on the same basis as
a non-dissenting holder of Westcoast Common Shares who did not make an election
and shall receive cash, Exchangeable Shares or Duke Energy Common Shares on the
same basis as holders of Non-Election Shares, 

but in no case shall Duke Energy, Exchangeco, Callco, Westcoast or any other
Person be required to recognize any Dissenting Shareholder as a holder of
Westcoast Common Shares after the Effective Time, and the names of each
Dissenting Shareholder shall be deleted from the register of holders of
Westcoast Common Shares at the Effective Time.

                                    ARTICLE 4

                       CERTIFICATES AND FRACTIONAL SHARES

         4.1 PAYMENT OF CASH

         At or promptly after the Effective Time, Exchangeco shall deposit with
the Depositary, for the benefit of the holders of Westcoast Common Shares who
will receive cash in connection with the Arrangement, cash in the amount of the
Cash Available. Upon surrender to the 


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Depositary for transfer to Exchangeco of a certificate which immediately prior
to or upon the Effective Time represented Westcoast Common Shares in respect of
which the holder is entitled to receive cash under the Arrangement, together
with a duly completed Letter of Transmittal and Election Form, and such other
documents and instruments as would have been required to effect the transfer of
the shares formerly represented by such certificate under the CBCA and the
by-laws of Westcoast and such additional documents and instruments as the
Depositary may reasonably require, the holder of such surrendered certificate
shall be entitled to receive in exchange therefor, and after the Effective Time
the Depositary shall deliver to such holder the amount of cash such holder is
entitled to receive under the Arrangement (together with any unpaid dividends or
distributions declared on the Westcoast Common Shares, if any, prior to the
Effective Time), and any certificate so surrendered shall forthwith be
transferred to Exchangeco. In the event of a transfer of ownership of such
Westcoast Common Shares that was not registered in the securities register of
Westcoast, the amount of cash payable for such Westcoast Common Shares under the
Arrangement may be delivered to the transferee if the certificate representing
such Westcoast Common Shares is presented to the Depositary as provided above,
accompanied by all documents required to evidence and effect such transfer and
to evidence that any applicable stock transfer taxes have been paid. Until
surrendered as contemplated by this Section 4.1, each certificate which
immediately prior to or upon the Effective Time represented one or more
outstanding Westcoast Common Shares that, under the Arrangement, were exchanged
or were deemed to be exchanged for cash pursuant to Section 2.2 shall be deemed
at all times after the Effective Time to represent only the right to receive
upon such surrender the cash payment contemplated by this Section 4.1.

         4.2 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES

         At or promptly after the Effective Time, Exchangeco shall deposit with
the Depositary, for the benefit of the holders of Westcoast Common Shares who
will receive Exchangeable Shares (and the Ancillary Rights) in connection with
the Arrangement, certificates representing the Maximum Number of Exchangeable
Shares. Upon surrender to the Depositary for transfer to Exchangeco of a
certificate which immediately prior to or upon the Effective Time represented
Westcoast Common Shares in respect of which the holder is entitled to receive
Exchangeable Shares under the Arrangement, together with a duly completed Letter
of Transmittal and Election Form and such other documents and instruments as
would have been required to effect the transfer of the shares formerly
represented by such certificate under the CBCA and the by-laws of Westcoast and
such additional documents and instruments as the Depositary may reasonably
require, the holder of such surrendered certificate shall be entitled to receive
in exchange therefor, and after the Effective Time the Depositary shall deliver
to such holder, a certificate representing that number (rounded down to the
nearest whole number) of Exchangeable Shares which such holder has the right to
receive (together with any unpaid dividends or distributions declared on the
Westcoast Common 


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                              PLAN OF ARRANGEMENT
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Shares prior to the Effective Time) and any certificate so surrendered shall
forthwith be transferred to Exchangeco. No interest shall be paid or accrued on
the cash in lieu of fractional shares, if any, or on unpaid dividends and
distributions, if any, payable to holders of certificates that formerly
represented Westcoast Common Shares. In the event of a transfer of ownership of
Westcoast Common Shares that was not registered in the securities register of
Westcoast, a certificate representing the proper number of Exchangeable Shares
(together with any unpaid dividends or distributions declared on the Westcoast
Common Shares prior to the Effective Time) may be issued to the transferee if
the certificate representing such Westcoast Common Shares is presented to the
Depositary as provided above, accompanied by all documents required to evidence
and effect such transfer and to evidence that any applicable stock transfer
taxes have been paid. Until surrendered as contemplated by this Section 4.2,
each certificate which immediately prior to or upon the Effective Time
represented one or more Westcoast Common Shares that, under the Arrangement,
were exchanged or were deemed to be exchanged for Exchangeable Shares pursuant
to Section 2.2 shall be deemed at all times after the Effective Time, but
subject to Section 4.5, to represent only the right to receive upon such
surrender a certificate representing that number (rounded down to the nearest
whole number) of Exchangeable Shares (together with any unpaid dividends or
distributions declared on the Westcoast Common Shares prior to the Effective
Time) which such holder has the right to receive.

         4.3 ISSUANCE OF CERTIFICATES REPRESENTING DUKE ENERGY COMMON SHARES

         At or promptly after the Effective Time, Exchangeco shall deposit with
the Depositary, for the benefit of the holders of Westcoast Common Shares who
will receive Duke Energy Common Shares in connection with the Arrangement,
certificates representing the Maximum Number of Duke Energy Common Shares. Upon
surrender to the Depositary for transfer to Exchangeco of a certificate which
immediately prior to or upon the Effective Time represented Westcoast Common
Shares in respect of which the holder is entitled to receive Duke Energy Common
Shares under the Arrangement, together with a duly completed Letter of
Transmittal and Election Form and such other documents and instruments as would
have been required to effect the transfer of the shares formerly represented by
such certificate under the CBCA and the by-laws of Westcoast and such additional
documents and instruments as the Depositary may reasonably require, the holder
of such surrendered certificate shall be entitled to receive in exchange
therefor, and after the Effective Time the Depositary shall deliver to such
holder, a certificate representing that number (rounded down to the nearest
whole number) of Duke Energy Common Shares which such holder has the right to
receive (together with any unpaid dividends or distributions declared on the
Westcoast Common Shares prior to the Effective Time) and any certificate so
surrendered shall forthwith be transferred to Exchangeco. No interest shall be
paid or accrued on the cash in lieu of fractional shares, if any, or on unpaid
dividends and distributions, if any, payable to holders of certificates that
formerly represented Westcoast Common Shares. In the event of a transfer of
ownership of Westcoast Common Shares that was not registered in the securities
register of Westcoast, a certificate representing the proper number of Duke
Energy Common Shares (together with any unpaid dividends or distributions
declared on the Westcoast Common Shares prior to the Effective Time) may be
issued to the transferee if the certificate representing such Westcoast Common
Shares is presented to the Depositary as provided above, accompanied by all
documents required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. Until surrendered as
contemplated by this Section 4.3, each certificate which immediately prior to or
upon the Effective Time represented one or more Westcoast Common Shares, under
the Arrangement, that were exchanged or were deemed to be exchanged for Duke
Energy Common Shares pursuant to Section 2.2 shall be deemed at all times after
the Effective Time, but subject to Section 4.5, to represent only the right to
receive upon such surrender a certificate representing that number (rounded down
to the nearest whole number) of Duke 


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Energy Common Shares (together with any unpaid dividends or distributions
declared prior to the Effective Time) which such holder has the right to
receive.

         4.4 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES

         No dividends or other distributions paid, declared or made with respect
to Exchangeable Shares or Duke Energy Common Shares, in each case with a record
date after the Effective Time, shall be paid to the holder of any unsurrendered
certificate which immediately prior to the Effective Time represented
outstanding Westcoast Common Shares that were exchanged for Exchangeable Shares
or Duke Energy Common Shares pursuant to Section 2.2 unless and until the holder
of such certificate shall comply with the provisions of Section 4.2 or 4.3, as
applicable. Subject to applicable law, at the time such holder shall have
complied with the provisions of Section 4.2 or 4.3, as applicable, (or, in the
case of clause (ii) below, at the appropriate payment date), there shall be paid
to the holder of the certificates formerly representing Westcoast Common Shares,
without interest, (i) the amount of dividends or other distributions with a
record date after the Effective Time theretofore paid with respect to the
Exchangeable Shares or Duke Energy Common Shares, as the case may be, to which
such holder is entitled pursuant hereto and (ii) on the appropriate payment
date, the amount of dividends or other distributions with a record date after
the Effective Time but prior to the date of compliance by such holder with the
provisions of Section 4.2 or 4.3 and a payment date subsequent to the date of
such compliance and payable with respect to such Exchangeable Shares or Duke
Energy Common Shares, as the case may be.

         4.5 NO FRACTIONAL SHARES

         No certificates representing fractional Exchangeable Shares or
fractional Duke Energy Common Shares shall be issued upon compliance with the
provisions of Section 4.2 or 4.3 and no dividend, stock split or other change in
the capital structure of Exchangeco or Duke Energy shall relate to any such
fractional security and such fractional interests shall not entitle the owner
thereof to exercise any rights as a security holder of Exchangeco or Duke
Energy. In lieu of any such fractional securities, each holder otherwise
entitled to a fractional interest in an Exchangeable Share or to a fractional
interest in a Duke Energy Common Share will be entitled to receive a cash
payment from the Depositary equal to the product of such fractional interest and
the Duke Energy Average Price as of the Effective Date, such amount to be
provided to the Depositary by Exchangeco upon request. Such payment with respect
to fractional shares is merely intended to provide a mechanical rounding off of,
and is not separately bargained for, consideration. If more than one certificate
formerly representing Westcoast Common Shares are surrendered for the account of
the same holder, the number of Exchangeable Shares or Duke Energy Common Shares
for which such certificates have been surrendered shall be computed on the basis
of the aggregate number of Westcoast Common Shares represented by the
certificates so surrendered. On the date of the notice referred to in Section
7.2 of the Exchangeable Share Provisions, the aggregate number of Exchangeable
Shares and the aggregate number of Duke Energy Common Shares for which no
certificates were issued as a result of the foregoing provisions of this Section
4.5 shall be deemed to have been surrendered by the Depositary for no
consideration to Exchangeco.


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         4.6 LOST CERTIFICATES

         In the event any certificate which immediately prior to the Effective
Time represented one or more outstanding Westcoast Common Shares that were
exchanged pursuant to Section 2.2 shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the holder of Westcoast Common
Shares claiming such certificate to be lost, stolen or destroyed, the Depositary
will issue in exchange for such lost, stolen or destroyed certificate, any cash
pursuant to Section 4.1 and/or one or more certificates representing one or more
Exchangeable Shares pursuant to Section 4.2 or Duke Energy Common Shares
pursuant to Section 4.3 (and any dividends or distributions with respect
thereto) in each case deliverable in accordance with Section 2.2. When
authorizing such payment in exchange for any lost, stolen or destroyed
certificate, the holder to whom cash and/or certificates representing
Exchangeable Shares or Duke Energy Common Shares are to be issued shall, as a
condition precedent to the issuance thereof, give a bond satisfactory to
Westcoast, Exchangeco, Duke Energy and their respective transfer agents in such
sum as Westcoast, Exchangeco or Duke Energy may direct or otherwise indemnify
Westcoast, Exchangeco and Duke Energy in a manner satisfactory to Westcoast,
Exchangeco and Duke Energy against any claim that may be made against Westcoast,
Exchangeco or Duke Energy with respect to the certificate alleged to have been
lost, stolen or destroyed.

         4.7 EXTINGUISHMENT OF RIGHTS

         Any certificate which immediately prior to the Effective Time
represented outstanding Westcoast Common Shares that are not held by a
Dissenting Shareholder who is ultimately entitled to be paid fair value of the
Westcoast Common Shares held by such Dissenting Shareholder but was exchanged or
was deemed to have been exchanged pursuant to Section 2.2, that has not been
deposited with all other instruments required by Section 4.1, 4.2 or 4.3, on or
prior to the earlier of the fifth anniversary of the Effective Date and the date
of the notice referred to in Section 7.2 of the Exchangeable Share Provisions
shall cease to represent a claim or interest of any kind or nature to such cash
payment and/or as a holder of Exchangeable Shares or Duke Energy Common Shares.
On such date, the cash payment and/or the Exchangeable Shares or Duke Energy
Common Shares (and any dividends or distributions with respect thereto) to which
the former holder of the certificate referred to in the preceding sentence was
ultimately entitled shall be deemed to have been surrendered for no
consideration to Exchangeco or Duke Energy, as the case may be, together with
all entitlements to dividends, distributions, cash and interest in respect
thereof held for such former holder. None of Duke Energy, Exchangeco, Callco,
Westcoast or the Depositary shall be liable to any Person in respect of any cash
payment, Duke Energy Common Shares or Exchangeable Shares (or dividends,
distributions and/or cash in lieu of fractional shares) delivered to a public
official pursuant to and in compliance with any applicable abandoned property,
escheat or similar law.

         4.8 WITHHOLDING RIGHTS

         Westcoast, Exchangeco, Callco, Duke Energy and the Depositary shall be
entitled to deduct and withhold from any dividend or consideration otherwise
payable to any holder of Westcoast Common Shares, Duke Energy Common Shares or
Exchangeable Shares such amounts as Westcoast, Exchangeco, Callco, Duke Energy
or the Depositary is required to deduct 


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                              PLAN OF ARRANGEMENT
   95
and withhold with respect to such payment under the ITA, the United States
Internal Revenue Code of 1986 or any provision of federal, provincial,
territorial, state, local or foreign tax law, in each case, as amended. To the
extent that amounts are so withheld, such withheld amounts shall be treated for
all purposes hereof as having been paid to the holder of the shares in respect
of which such deduction and withholding was made, provided that such withheld
amounts are actually remitted to the appropriate taxing authority. To the extent
that the amount so required to be deducted or withheld from any payment to a
holder exceeds the cash portion of the consideration otherwise payable to the
holder, Westcoast, Exchangeco, Callco, Duke Energy and the Depositary are hereby
authorized to sell or otherwise dispose of such portion of the consideration as
is necessary to provide sufficient funds to Westcoast, Exchangeco, Callco, Duke
Energy or the Depositary, as the case may be, to enable it to comply with such
deduction or withholding requirement and Westcoast, Exchangeco, Callco, Duke
Energy or the Depositary shall notify the holder thereof and remit any unapplied
balance of the net proceeds of such sale.

         4.9 TERMINATION OF DEPOSITARY

         Any Exchangeable Shares or Duke Energy Common Shares, together with any
funds held by the Depositary, that remain undistributed to former holders of
Westcoast Common Shares nine months after the Effective Date shall be delivered
to Exchangeco, upon demand therefor, and holders of certificates previously
representing Westcoast Common Shares who have not theretofore complied with
Sections 4.1, 4.2 or 4.3 shall thereafter look only to Exchangeco for payment of
any claim to cash, Exchangeable Shares, Duke Energy Common Shares, cash in lieu
of fractional shares thereof or dividends or distributions, if any, in respect
thereof.

                                    ARTICLE 5

                       CERTAIN RIGHTS OF CALLCO TO ACQUIRE
                               EXCHANGEABLE SHARES

         5.1 CALLCO LIQUIDATION CALL RIGHT

               (a) Callco shall have the overriding right (the "LIQUIDATION CALL
RIGHT"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of Exchangeco or any other distribution of the assets
of Exchangeco among its shareholders for the purpose of winding-up its affairs,
pursuant to Article 5 of the Exchangeable Share Provisions, to purchase from all
but not less than all of the holders of Exchangeable Shares (other than any
holder of Exchangeable Shares which is an affiliate of Duke Energy) on the
Liquidation Date all but not less than all of the Exchangeable Shares held by
each such holder upon payment by Callco to each such holder of the Exchangeable
Share Price applicable on the last Business Day prior to the Liquidation Date
(the "LIQUIDATION CALL PURCHASE PRICE") in accordance with Section 5.1(c). In
the event of the exercise of the Liquidation Call Right by Callco, each holder
shall be obligated to sell all the Exchangeable Shares held by such holder to
Callco on the Liquidation Date upon payment by Callco to such holder of the
Liquidation Call Purchase Price for each such Exchangeable Share, whereupon
Exchangeco shall have no obligation to pay any Liquidation Amount to the holders
of such shares so purchased by Callco.


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                              PLAN OF ARRANGEMENT
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               (b) To exercise the Liquidation Call Right, Callco must notify
Exchangeco and Exchangeco's transfer agent (the "TRANSFER AGENT"), as agent for
the holders of Exchangeable Shares, and Exchangeco of Callco's intention to
exercise such right at least 45 days before the Liquidation Date in the case of
a voluntary liquidation, dissolution or winding-up of Exchangeco or any other
voluntary distribution of the assets of Exchangeco among its shareholders for
the purpose of winding-up its affairs, and at least five Business Days before
the Liquidation Date in the case of an involuntary liquidation, dissolution or
winding-up of Exchangeco or any other involuntary distribution of the assets of
Exchangeco among its shareholders for the purpose of winding up its affairs. The
Transfer Agent will notify the holders of Exchangeable Shares as to whether
Callco has exercised the Liquidation Call Right forthwith after the expiry of
the period during which the same may be exercised by Callco. If Callco exercises
the Liquidation Call Right, then on the Liquidation Date, Callco will purchase
and the holders of Exchangeable Shares will sell all of the Exchangeable Shares
then outstanding for a price per share equal to the Liquidation Call Purchase
Price.

               (c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Liquidation Call Right, Callco shall deposit
or cause to be deposited with the Transfer Agent, on or before the Liquidation
Date, the Exchangeable Share Consideration representing the total Liquidation
Call Purchase Price. Provided that such Exchangeable Share Consideration has
been so deposited with the Transfer Agent, on and after the Liquidation Date,
the holders of the Exchangeable Shares shall cease to be holders of the
Exchangeable Shares and shall not be entitled to exercise any of the rights of
holders in respect thereof (including any rights under the Voting and Exchange
Trust Agreement), other than the right to receive their proportionate part of
the total Liquidation Call Purchase Price payable by Callco, without interest,
upon presentation and surrender by the holder of certificates representing the
Exchangeable Shares held by such holder and the holder shall on and after the
Liquidation Date be considered and deemed for all purposes to be the holder of
the Duke Energy Common Shares to which such holder is entitled. Upon surrender
to the Transfer Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as may be required to
effect a transfer of Exchangeable Shares under the CBCA and the by-laws of
Exchangeco and such additional documents and instruments as the Transfer Agent
may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the Transfer
Agent on behalf of Callco shall deliver to such holder, the Exchangeable Share
Consideration to which such holder is entitled. If Callco does not exercise the
Liquidation Call Right in the manner described above, on the Liquidation Date
the holders of the Exchangeable Shares will be entitled to receive in exchange
therefor the Liquidation Amount otherwise payable by Exchangeco in connection
with the liquidation, dissolution or winding-up of Exchangeco pursuant to
Article 5 of the Exchangeable Share Provisions.


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         5.2 CALLCO REDEMPTION CALL RIGHT

         In addition to Callco's rights contained in the Exchangeable Share
Provisions, including the Retraction Call Right (as defined in the Exchangeable
Share Provisions), Callco shall have the following rights in respect of the
Exchangeable Shares:

               (a) Callco shall have the overriding right (the "REDEMPTION CALL
RIGHT"), in the event of and notwithstanding the proposed redemption of the
Exchangeable Shares by Exchangeco pursuant to Article 7 of the Exchangeable
Share Provisions, to purchase from all but not less than all of the holders of
Exchangeable Shares (other than any holder of Exchangeable Shares which is an
affiliate of Duke Energy) on the Redemption Date all but not less than all of
the Exchangeable Shares held by each such holder upon payment by Callco to each
such holder of the Exchangeable Share Price applicable on the last Business Day
prior to the Redemption Date (the "REDEMPTION CALL PURCHASE PRICE") in
accordance with 5.2(c). In the event of the exercise of the Redemption Call
Right by Callco, each holder shall be obligated to sell all the Exchangeable
Shares held by such holder to Callco on the Redemption Date upon payment by
Callco to such holder of the Redemption Call Purchase Price for each such
Exchangeable Share, whereupon Exchangeco shall have no obligation to redeem, or
to pay the Redemption Price in respect of, such shares so purchased by Callco.

               (b) To exercise the Redemption Call Right, Callco must notify the
Transfer Agent, as agent for the holders of Exchangeable Shares, and Exchangeco
of Callco's intention to exercise such right at least 60 days before the
Redemption Date, except in the case of a redemption occurring as a result of a
Duke Energy Control Transaction, an Exchangeable Share Voting Event or an Exempt
Exchangeable Share Voting Event (each as defined in the Exchangeable Share
Provisions), in which case Callco shall so notify the Transfer Agent and
Exchangeco on or before the Redemption Date. The Transfer Agent will notify the
holders of the Exchangeable Shares as to whether Callco has exercised the
Redemption Call Right forthwith after the expiry of the period during which the
same may be exercised by Callco. If Callco exercises the Redemption Call Right,
then on the Redemption Date, Callco will purchase and the holders of
Exchangeable Shares will sell all of the Exchangeable Shares then outstanding
for a price per share equal to the Redemption Call Purchase Price.

               (c) For the purposes of completing the purchase of the
Exchangeable Shares pursuant to the Redemption Call Right, Callco shall deposit
or cause to be deposited with the Transfer Agent, on or before the Redemption
Date, the Exchangeable Share Consideration representing the total Redemption
Call Purchase Price. Provided that such Exchangeable Share Consideration has
been so deposited with the Transfer Agent, on and after the Redemption Date the
holders of the Exchangeable Shares shall cease to be holders of the Exchangeable
Shares and shall not be entitled to exercise any of the rights of holders in
respect thereof (including any rights under the Voting and Exchange Trust
Agreement), other than the right to receive their proportionate part of the
total Redemption Call Purchase Price payable by Callco, without interest, upon
presentation and surrender by the holder of certificates representing the
Exchangeable Shares held by such holder and the holder shall on and after the
Redemption Date be considered and deemed for all purposes to be the holder of
the Duke Energy Common Shares to which such holder is entitled. Upon surrender
to the Transfer Agent of a certificate or certificates representing Exchangeable
Shares, together with such other documents and instruments as may be required to
effect a transfer of Exchangeable Shares under the CBCA and the by-laws of
Exchangeco and such additional documents and instruments as the Transfer Agent


                                      -20-

                              PLAN OF ARRANGEMENT
   98
may reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the Transfer
Agent on behalf of Callco shall deliver to such holder, the Exchangeable Share
Consideration to which such holder is entitled. If Callco does not exercise the
Redemption Call Right in the manner described above, on the Redemption Date the
holders of the Exchangeable Shares will be entitled to receive in exchange
therefor the Redemption Price otherwise payable by Exchangeco in connection with
the redemption of the Exchangeable Shares pursuant to Article 7 of the
Exchangeable Share Provisions.

                                    ARTICLE 6

                                   AMENDMENTS

         6.1 AMENDMENTS TO PLAN OF ARRANGEMENT

         Westcoast and Duke Energy reserve the right to amend, modify and/or
supplement this Plan of Arrangement at any time and from time to time prior to
the Effective Date subject to amendment in the manner provided for in the
Combination Agreement, provided that each such amendment, modification and/or
supplement must be (i) set out in writing, (ii) approved by Duke Energy, (iii)
filed with the Court and, if made following the Westcoast Meeting, approved by
the Court, and (iv) communicated to Westcoast Securityholders if and as required
by the Court.

         Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Westcoast and Duke Energy at any time prior to the Westcoast
Meeting (provided that Duke Energy shall have consented thereto) with or without
any other prior notice or communication, and if so proposed and accepted by the
Persons voting at the Westcoast Meeting (other than as may be required under the
Interim Order), shall become part of this Plan of Arrangement for all purposes.

         Any amendment, modification or supplement to this Plan of Arrangement
that is approved or directed by the Court following the Westcoast Meeting shall
be effective only if (i) it is consented to by each of Westcoast and Duke Energy
and (ii) if required by the Court, it is consented to by Westcoast
Securityholders voting in the manner directed by the Court.

         Subject to applicable law, any amendment, modification or supplement to
this Plan of Arrangement may be made following the Effective Date unilaterally
by Duke Energy, provided that it concerns a matter which, in the reasonable
opinion of Duke Energy, is of an administrative nature required to better give
effect to the implementation of this Plan of Arrangement and is not adverse to
the financial or economic interests of any Westcoast Securityholder.


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                              PLAN OF ARRANGEMENT
   99
                                   ARTICLE 7

                               FURTHER ASSURANCES

         7.1 Notwithstanding that the transactions and events set out herein
shall occur and be deemed to occur in the order set out in this Plan of
Arrangement without any further act or formality, each of the parties to the
Combination Agreement shall make, do and execute, or cause to be made, done and
executed, all such further acts, deeds, agreements, transfers, assurances,
instruments or documents as may reasonably be required by any of them in order
further to document or evidence any of the transactions or events set out
herein.


                                      -22-

                              PLAN OF ARRANGEMENT
   100
                                   APPENDIX 1
                           TO THE PLAN OF ARRANGEMENT

                           PROVISIONS ATTACHING TO THE
                             EXCHANGEABLE SHARES OF
                               3946509 CANADA INC.

         The Exchangeable Shares shall have the following rights, privileges,
restrictions and conditions:

                                    ARTICLE 1

                                 INTERPRETATION

         1.1 For the purposes of these share provisions:

         "AFFILIATE" has the meaning ascribed thereto in the Securities Act,
         unless otherwise expressly stated herein;

         "ARRANGEMENT" means an arrangement under section 192 of the CBCA on the
         terms and subject to the conditions set out in the Plan of Arrangement
         to which plan these share provisions are attached as Appendix 1 and
         which Plan of Arrangement (other than Appendix 1 thereto) is attached
         to the Combination Agreement as Schedule E, subject to any amendments
         or variations thereto made in accordance with Article 6 of the Plan of
         Arrangement or Section 7.1 of the Combination Agreement or made at the
         direction of the Court in the Final Order;

         "BOARD OF DIRECTORS" means the board of directors of the Company;

         "BUSINESS DAY" means any day on which commercial banks are generally
         open for business in New York, New York and Vancouver, British
         Columbia, other than a Saturday, a Sunday or a day observed as a
         holiday in New York, New York under the laws of the State of New York
         or the federal laws of the United States of America or in Vancouver,
         British Columbia under the laws of the Province of British Columbia or
         the federal laws of Canada;

         "CALLCO" means 3058368 Nova Scotia Company, an unlimited liability
         company existing under the laws of the Province of Nova Scotia and an
         indirect wholly-owned subsidiary of Duke Energy;

         "CALLCO CALL NOTICE" has the meaning ascribed thereto in Section 6.3 of
         these share provisions;

         "CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed in
         a currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT")
         at any date the product obtained by multiplying:

                  (a) the Foreign Currency Amount, by


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                  (b) the noon spot exchange rate on such date for such foreign
         currency expressed in Canadian dollars as reported by the Bank of
         Canada or, in the event such spot exchange rate is not available, such
         spot exchange rate on such date for such foreign currency expressed in
         Canadian dollars as may be deemed by the Board of Directors to be
         appropriate for such purpose;

         "CBCA" means Canada Business Corporations Act, as amended from time to
         time prior to the Effective Date;

         "COMBINATION AGREEMENT" means the agreement made as of the 20th day of
         September, 2001 among Duke Energy, Callco, the Company and Westcoast,
         as amended, supplemented and/or restated in accordance therewith prior
         to the Effective Date, providing for, among other things, the
         Arrangement;

         "COMMON SHARES" means the common shares in the capital of the Company;

         "COMPANY" means 3946509 Canada Inc., a corporation existing under the
         CBCA;

         "CURRENT MARKET PRICE" means, in respect of a Duke Energy Common Share
         on any date, the Canadian Dollar Equivalent of the average of the
         closing bid and asked prices of Duke Energy Common Shares during a
         period of 20 consecutive trading days ending not more than three
         trading days before such date on the NYSE, or, if the Duke Energy
         Common Shares are not then listed on the NYSE, on such other stock
         exchange or automated quotation system on which the Duke Energy Common
         Shares are listed or quoted, as the case may be, as may be selected by
         the Board of Directors for such purpose; provided, however, that if in
         the opinion of the Board of Directors the public distribution or
         trading activity of Duke Energy Common Shares during such period does
         not create a market which reflects the fair market value of a Duke
         Energy Common Share, then the Current Market Price of a Duke Energy
         Common Share shall be determined by the Board of Directors, in good
         faith and in its sole discretion, and provided further that any such
         selection, opinion or determination by the Board of Directors shall be
         conclusive and binding;

         "DIRECTOR" means the Director appointed pursuant to section 260 of the
         CBCA;

         "DUKE ENERGY" means Duke Energy Corporation, a corporation existing
         under the laws of the State of Duke North Carolina;

         "DUKE ENERGY COMMON SHARES" mean the shares of common stock, no par
         value per share, in the capital of Duke Energy and any other securities
         into which such shares may be changed;

         "DUKE ENERGY CONTROL TRANSACTION" means any merger, amalgamation,
         tender offer, material sale of shares or rights or interests therein or
         thereto or similar transactions involving Duke Energy, or any proposal
         to carry out the same; and

         "DUKE ENERGY DIVIDEND DECLARATION DATE" means the date on which the
         board of directors of Duke Energy declares any dividend on the Duke
         Energy Common Shares.


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         "EFFECTIVE DATE" means the date shown on the certificate of arrangement
         to be issued by the Director under the CBCA giving effect to the
         Arrangement;

         "EFFECTIVE TIME" means 12:01 a.m. (Vancouver time) on the Effective
         Date;

         "EXCHANGEABLE SHARE CONSIDERATION" means, with respect to each
         Exchangeable Share, for any acquisition of, redemption of or
         distribution of assets of the Company in respect of, or purchase
         pursuant to, these share provisions, the Plan of Arrangement, the
         Support Agreement or the Voting and Exchange Trust Agreement:

                  (a) the Current Market Price of one Duke Energy Common Share
         deliverable in connection with such action; plus

                  (b) a cheque or cheques payable at par at any branch of the
         bankers of the payor in the amount of all declared, payable and unpaid,
         and all undeclared but payable, cash dividends deliverable in
         connection with such action; plus

                  (c) such stock or other property constituting any declared and
         unpaid non-cash dividends deliverable in connection with such action,

         provided that (i) the part of the consideration which represents (a)
         above shall be fully paid and satisfied by the delivery of one Duke
         Energy Common Share, such share to be duly issued, fully paid and
         non-assessable, (ii) the part of the consideration which represents (c)
         above shall be fully paid and satisfied by delivery of such non-cash
         items, (iii) any such consideration shall be delivered free and clear
         of any lien, claim, encumbrance, security interest or adverse claim or
         interest and (iv) any such consideration shall be paid less any tax
         required to be deducted and withheld therefrom and without interest;

         "EXCHANGEABLE SHARE PRICE" means, for each Exchangeable Share, an
         amount equal to the aggregate of:

                  (a) the Current Market Price of a Duke Energy Common Share;
         plus

                  (b) an additional amount equal to the full amount of all cash
         dividends declared, payable and unpaid, on such Exchangeable Share;
         plus

                  (c) an additional amount equal to the full amount of all
         dividends declared and payable or paid on Duke Energy Common Shares
         which have not been declared or paid on Exchangeable Shares in
         accordance herewith; plus

                  (d) an additional amount representing the full amount of all
         non-cash dividends declared, payable and unpaid, on such Exchangeable
         Share;

         "EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of which
         holders of Exchangeable Shares are entitled to vote as shareholders of
         the Company, other than an Exempt Exchangeable Share Voting Event, and,
         for greater certainty, excluding any matter in respect of which holders
         of Exchangeable Shares are entitled to vote (or instruct 


                                      1-3
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         the Trustee to vote) in their capacity as Beneficiaries under (and as
         that term is defined in) the Voting and Exchange Trust Agreement;

         "EXCHANGEABLE SHARES" mean the non-voting exchangeable shares in the
         capital of the Company, having the rights, privileges, restrictions and
         conditions set forth herein;

         "EXEMPT EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of
         which holders of Exchangeable Shares are entitled to vote as
         shareholders of the Company in order to approve or disapprove, as
         applicable, any change to, or in the rights of the holders of, the
         Exchangeable Shares, where the approval or disapproval, as applicable,
         of such change would be required to maintain the equivalence of the
         Exchangeable Shares and the Duke Energy Common Shares;

         "GOVERNMENTAL ENTITY" means any (a) multinational, federal, provincial,
         territorial, state, regional, municipal, local or other government,
         governmental or public department, central bank, court, tribunal,
         arbitral body, commission, board, bureau or agency, domestic or
         foreign, (b) subdivision, agent, commission, board, or authority of any
         of the foregoing, or (c) quasi-governmental or private body exercising
         any regulatory, expropriation or taxing authority under or for the
         account of any of the foregoing;

         "HOLDER" means, when used with reference to the Exchangeable Shares,
         the holders of Exchangeable Shares shown from time to time in the
         register maintained by or on behalf of the Company in respect of the
         Exchangeable Shares and, when used with reference to the Westcoast
         Options, means the Person to whom such option was issued;

         "LIQUIDATION AMOUNT" has the meaning ascribed thereto in Section 5.1(a)
         of these share provisions;

         "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan
         of Arrangement;

         "LIQUIDATION DATE" has the meaning ascribed thereto in Section 5.1(a)
         of these share provisions;

         "NYSE" means The New York Stock Exchange, Inc.;

         "PERSON" includes any individual, firm, partnership, joint venture,
         venture capital fund, limited liability company, unlimited liability
         company, association, trust, trustee, executor, administrator, legal
         personal representative, estate, group, body corporate, corporation,
         unincorporated association or organization, Governmental Entity,
         syndicate or other entity, whether or not having legal status;

         "PLAN OF ARRANGEMENT" means the plan of arrangement involving and
         affecting Westcoast, Duke Energy, Callco, the Company, all holders and
         all beneficial owners of Westcoast Common Shares, all holders and all
         beneficial owners of Exchangeable Shares and all holders of Westcoast
         Options under section 192 of the CBCA contemplated in the Combination
         Agreement, to which these share provisions are attached as Appendix 1;


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         "PURCHASE PRICE" has the meaning ascribed thereto in Section 6.3 of
         these share provisions;

         "REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in
         the Plan of Arrangement;

         "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
         Arrangement;

         "REDEMPTION DATE" means the date, if any, established by the Board of
         Directors for the redemption by the Company of all but not less than
         all of the outstanding Exchangeable Shares pursuant to Article 7 of
         these share provisions, which date shall be no earlier than the eighth
         anniversary of the Effective Date, unless:

                  (a) there are less than twenty percent (20%) of the number of
         Exchangeable Shares issuable on the Effective Date outstanding (other
         than Exchangeable Shares held by Duke Energy and its affiliates, as
         such number of shares may be adjusted as deemed appropriate by the
         Board of Directors to give effect to any subdivision or consolidation
         of or stock dividend on the Exchangeable Shares, any issue or
         distribution of rights to acquire Exchangeable Shares or securities
         exchangeable for or convertible into Exchangeable Shares, any issue or
         distribution of other securities or rights or evidences of indebtedness
         or assets, or any other capital reorganization or other transaction
         affecting the Exchangeable Shares), in which case the Board of
         Directors may accelerate such redemption date to such date prior to the
         eighth anniversary of the Effective Date as it may determine, upon at
         least 60 days' prior written notice to the registered holders of the
         Exchangeable Shares and the Trustee;

                  (b) a Duke Energy Control Transaction occurs, in which case,
         provided that the Board of Directors determines, in good faith and in
         its sole discretion, that it is not reasonably practicable to
         substantially replicate the terms and conditions of the Exchangeable
         Shares in connection with such Duke Energy Control Transaction and that
         the redemption of all but not less than all of the outstanding
         Exchangeable Shares is necessary to enable the completion of such Duke
         Energy Control Transaction in accordance with its terms, the Board of
         Directors may accelerate such redemption date to such date prior to the
         eighth anniversary of the Effective Date as it may determine, upon such
         number of days' prior written notice to the registered holders of the
         Exchangeable Shares and the Trustee as the Board of Directors may
         determine to be reasonably practicable in such circumstances;

                  (c) an Exchangeable Share Voting Event is proposed, in which
         case, provided that the Board of Directors has determined, in good
         faith and in its sole discretion, that it is not reasonably practicable
         to accomplish the business purpose intended by the Exchangeable Share
         Voting Event, which business purpose must be bona fide and not for the
         primary purpose of causing the occurrence of a Redemption Date, the
         redemption date shall be the Business Day prior to the record date for
         any meeting or vote of the holders of the Exchangeable Shares to
         consider the Exchangeable Share Voting Event and the Board of Directors
         shall give such number of days' prior written notice of such 


                                      1-5
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         redemption to the registered holders of the Exchangeable Shares and the
         Trustee as the Board of Directors may determine to be reasonably
         practicable in such circumstances; or

                  (d) an Exempt Exchangeable Share Voting Event is proposed and
         the holders of the Exchangeable Shares fail to take the necessary
         action at a meeting or other vote of holders of Exchangeable Shares, to
         approve or disapprove, as applicable, the Exempt Exchangeable Share
         Voting Event, in which case the redemption date shall be the Business
         Day following the day on which the holders of the Exchangeable Shares
         failed to take such action,

         provided, however, that the accidental failure or omission to give any
         notice of redemption under clauses (a), (b) or (c) above to any of such
         holders of Exchangeable Shares shall not affect the validity of any
         such redemption;

         "REDEMPTION PRICE" has the meaning ascribed thereto in Section 7.1 of
         these share provisions;

         "RETRACTED SHARES" has the meaning ascribed thereto in Section 6.1(a)
         of these share provisions;

         "RETRACTION CALL RIGHT" has the meaning ascribed thereto in Section
         6.1(c) of these share provisions;

         "RETRACTION DATE" has the meaning ascribed thereto in Section 6.1(b) of
         these share provisions;

         "RETRACTION PRICE" has the meaning ascribed thereto in Section 6.1 of
         these share provisions;

         "RETRACTION REQUEST" has the meaning ascribed thereto in Section 6.1 of
         these share provisions;

         "SECURITIES ACT" means the Securities Act (Ontario) and the rules,
         regulations and policies made thereunder, as now in effect and as they
         may be amended from time to time prior to the Effective Date;

         "SUPPORT AGREEMENT" means the agreement made between Westcoast, Duke
         Energy, Callco and the Company substantially in the form and content of
         Schedule F annexed to the Combination Agreement, with such changes
         thereto as the parties to the Combination Agreement, acting reasonably,
         may agree;

         "TRANSFER AGENT" means _____________ Trust Company of Canada or such
         other Person as may from time to time be appointed by the Company as
         the registrar and transfer agent for the Exchangeable Shares;

         "TRUSTEE" means the trustee to be chosen by Duke Energy and Westcoast,
         acting reasonably, to act as trustee under the Voting and Exchange
         Trust Agreement, being a corporation organized and existing under the
         laws of the State of New York or the State  


                                      1-6
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         of Delaware, and any successor trustee appointed under the Voting
         and Exchange Trust Agreement;

         "VOTING AND EXCHANGE TRUST AGREEMENT" means the agreement made between
         Duke Energy, Callco, the Company and the Trustee in connection with the
         Plan of Arrangement substantially in the form and content of Schedule G
         annexed to the Combination Agreement with such changes thereto as the
         parties to the Combination Agreement, acting reasonably, may agree;

         "WESTCOAST" means Westcoast Energy Inc., a corporation existing under
         the laws of Canada;

         "WESTCOAST COMMON SHARES" means the issued and outstanding common
         shares in the capital of Westcoast immediately prior to the Effective
         Time;

         "WESTCOAST OPTIONS" means all Westcoast Common Share purchase options
         granted under the Westcoast Stock Option Plans;

         "WESTCOAST STOCK OPTION PLANS" means Westcoast's Long-Term Incentive
         Share Option Plan 1989 as amended effective April 26, 2000 and
         Westcoast's 1999 Key Employee Plan;

                                    ARTICLE 2

                         RANKING OF EXCHANGEABLE SHARES

         2.1 The Exchangeable Shares shall be entitled to a preference over the
Common Shares and any other shares ranking junior to the Exchangeable Shares
with respect to the payment of dividends and the distribution of assets in the
event of the liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary, or any other distribution of the assets of the
Company, among its shareholders for the purpose of winding-up its affairs.

                                    ARTICLE 3

                                    DIVIDENDS

         3.1 A holder of an Exchangeable Share shall be entitled to receive and
the Board of Directors shall, subject to applicable law, on each Duke Energy
Dividend Declaration Date, declare a dividend on each Exchangeable Share:

               (a) in the case of a cash dividend declared on the Duke Energy
Common Shares, in an amount in cash for each Exchangeable Share in U.S. dollars,
or the Canadian Dollar Equivalent thereof on the Duke Energy Dividend
Declaration Date, in each case, corresponding to the cash dividend declared on
each Duke Energy Common Share;

               (b) in the case of a stock dividend declared on the Duke Energy
Common Shares to be paid in Duke Energy Common Shares subject to Section 3.2, by
the issue or transfer by the Company of such number of Exchangeable Shares for
each Exchangeable Share as is 


                                      1-7
   107
equal to the number of Duke Energy Common Shares to be paid on each Duke Energy
Common Share; or

               (c) in the case of a dividend declared on the Duke Energy Common
Shares in property other than cash or Duke Energy Common Shares, in such type
and amount of property for each Exchangeable Share as is the same as or
economically equivalent to (to be determined by the Board of Directors as
contemplated by Section 3.6) the type and amount of property declared as a
dividend on each Duke Energy Common Share.

         Such dividends shall be paid out of money, assets or property of the
Company properly applicable to the payment of dividends, or out of authorized
but unissued shares of the Company, as applicable.

         3.2 In the case of a stock dividend declared on the Duke Energy Common
Shares to be paid in Duke Energy Common Shares, in lieu of declaring the stock
dividend contemplated by Section 3.1(b) on the Exchangeable Shares, the Board of
Directors may, in good faith and in its discretion and subject to applicable law
and to obtaining all required regulatory approvals, subdivide, redivide or
change (the "SUBDIVISION") each issued and unissued Exchangeable Share on the
basis that each Exchangeable Share before the subdivision becomes a number of
Exchangeable Shares equal to the sum of (i) one Duke Energy Common Share and
(ii) the number of Duke Energy Common shares to be paid as a share dividend on
each Duke Energy Common Share. In making such Subdivision, the Board of
Directors shall consider the effect thereof upon the then outstanding
Exchangeable Shares and the general taxation consequences of the Subdivision to
the holders of the Exchangeable Shares. In such instance, and notwithstanding
any other provision hereof, such Subdivision shall become effective on the
effective date specified in Section 3.4 without any further act or formality on
the part of the Board of Directors or of the holders of Exchangeable Shares. For
greater certainty, subject to applicable law, no approval of the holders of
Exchangeable Shares to an amendment to the articles of the Company shall be
required to give effect to such subdivision.

         3.3 Cheques of the Company payable at par at any branch of the bankers
of the Company shall be issued in respect of any cash dividends contemplated by
Section 3.1(a) and the sending of such a cheque to each holder of an
Exchangeable Share shall satisfy the cash dividend represented thereby unless
the cheque is not paid on presentation. Subject to applicable law, certificates
registered in the name of the registered holder of Exchangeable Shares shall be
issued or transferred in respect of any stock dividends contemplated by Section
3.1(b) or any Subdivision contemplated by Section 3.2 and the sending of such a
certificate to each holder of an Exchangeable Share shall satisfy the stock
dividend represented thereby. Such other type and amount of property in respect
of any dividends contemplated by Section 3.1(c) shall be issued, distributed or
transferred by the Company in such manner as it shall determine and the
issuance, distribution or transfer thereof by the Company to each holder of an
Exchangeable Share shall satisfy the dividend represented thereby. No holder of
an Exchangeable Share shall be entitled to recover by action or other legal
process against the Company any dividend that is represented by a cheque that
has not been duly presented to the Company's bankers for payment or that
otherwise remains unclaimed for a period of six years from the date on which
such dividend was first payable.


                                      1-8
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         3.4 The record date for the determination of the holders of
Exchangeable Shares entitled to receive payment of, and the payment date for,
any dividend declared on the Exchangeable Shares under Section 3.1 shall be the
same dates as the record date and payment date, respectively, for the
corresponding dividend declared on the Duke Energy Common Shares. The record
date for the determination of the holders of Exchangeable Shares entitled to
receive Exchangeable Shares in connection with any Subdivision of the
Exchangeable Shares under Section 3.2 and the effective date of such Subdivision
shall be the same dates as the record date and payment date, respectively, for
the corresponding dividend declared on the Duke Energy Common Shares

         3.5 If on any payment date for any dividends declared on the
Exchangeable Shares under Section 3.1 the dividends are not paid in full on all
of the Exchangeable Shares then outstanding, any such dividends that remain
unpaid shall be paid on a subsequent date or dates determined by the Board of
Directors on which the Company shall have sufficient moneys, assets or property
properly applicable to the payment of such dividends.

         3.6 The Board of Directors shall determine, in good faith and in its
sole discretion, economic equivalence for the purposes of Sections 3.1 and 3.2,
and each such determination shall be conclusive and binding on the Company and
its shareholders. In making each such determination, the following factors
shall, without excluding other factors determined by the Board of Directors to
be relevant, be considered by the Board of Directors:

               (a) in the case of any stock dividend or other distribution
payable in Duke Energy Common Shares, the number of such shares issued in
proportion to the number of Duke Energy Common Shares previously outstanding;

               (b) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Duke Energy Common Shares (or
securities exchangeable for or convertible into or carrying rights to acquire
Duke Energy Common Shares), the relationship between the exercise price of each
such right, option or warrant and the Current Market Price;

               (c) in the case of the issuance or distribution of any other form
of property (including any shares or securities of Duke Energy of any class
other than Duke Energy Common Shares, any rights, options or warrants other than
those referred to in Section 3.6(b) above, any evidences of indebtedness of Duke
Energy or any assets of Duke Energy) the relationship between the fair market
value (as determined by the Board of Directors in the manner above contemplated)
of such property to be issued or distributed with respect to each outstanding
Duke Energy Common Share and the Current Market Price; and

               (d) in all such cases, the general taxation consequences of the
relevant event to holders of Exchangeable Shares to the extent that such
consequences may differ from the taxation consequences to holders of Duke Energy
Common Shares as a result of differences between taxation laws of Canada and the
United States (except for any differing consequences arising as a result of
differing marginal taxation rates and without regard to the individual
circumstances of holders of Exchangeable Shares).


                                      1-9
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         3.7 Except as provided in this Article 3, the holders of Exchangeable
Shares shall not be entitled to receive dividends in respect thereof.

                                    ARTICLE 4

                              CERTAIN RESTRICTIONS

         4.1 So long as any of the Exchangeable Shares are outstanding, the
Company shall not at any time without, but may at any time with, the approval of
the holders of the Exchangeable Shares given as specified in Section 10.2 of
these share provisions:

               (a) pay any dividends on the Common Shares or any other shares
ranking junior to the Exchangeable Shares with respect to the payment of
dividends, other than stock dividends payable in Common Shares or any such other
shares ranking junior to the Exchangeable Shares, as the case may be;

               (b) redeem or purchase or make any capital distribution in
respect of Common Shares or any other shares ranking junior to the Exchangeable
Shares with respect to the payment of dividends or on any liquidation,
dissolution or winding-up of the Company or any other distribution of the assets
of the Company;

               (c) redeem or purchase any other shares of the Company ranking
equally with the Exchangeable Shares with respect to the payment of dividends or
on any liquidation, dissolution or winding-up of the Company or any other
distribution of the assets of the Company; or

               (d) issue any Exchangeable Shares or any other shares of the
Company ranking equally with, or superior to, the Exchangeable Shares other than
by way of stock dividends to the holders of such Exchangeable Shares;

         The restrictions in Sections 4.1(a), (b), (c) and (d) shall not apply
if all dividends on the outstanding Exchangeable Shares corresponding to
dividends declared and paid to date on the Duke Energy Common Shares shall have
been declared and paid on the Exchangeable Shares.

                                    ARTICLE 5

                           DISTRIBUTION ON LIQUIDATION

         5.1 In the event of the liquidation, dissolution or winding-up of the
Company or any other distribution of the assets of the Company among its
shareholders for the purpose of winding up its affairs, a holder of Exchangeable
Shares shall be entitled, subject to applicable law and to the exercise by
Callco of the Liquidation Call Right, to receive from the assets of the Company
in respect of each Exchangeable Share held by such holder on the effective date
(the "LIQUIDATION DATE") of such liquidation, dissolution, winding-up or
distribution of assets, before any distribution of any part of the assets of the
Company among the holders of the Common Shares or any other shares ranking
junior to the Exchangeable Shares, an amount per share equal to the Exchangeable
Share Price applicable on the last Business Day prior to the Liquidation Date
(the "LIQUIDATION AMOUNT").


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         5.2 On or promptly after the Liquidation Date, and subject to the
exercise by Callco of the Liquidation Call Right, the Company shall cause to be
delivered to the holders of the Exchangeable Shares the Liquidation Amount for
each such Exchangeable Share upon presentation and surrender of the certificates
representing such Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the CBCA and the articles and by-laws of the Company and such additional
documents and instruments as the Transfer Agent and the Company may reasonably
require, at the registered office of the Company or at any office of the
Transfer Agent as may be specified by the Company by notice to the holders of
the Exchangeable Shares. Payment of the total Liquidation Amount for such
Exchangeable Shares shall be made by delivery to each holder, at the address of
the holder recorded in the register of the Company for the Exchangeable Shares
or by holding for pick-up by the holder at the registered office of the Company
or at any office of the Transfer Agent as may be specified by the Company by
notice to the holders of Exchangeable Shares, on behalf of the Company of the
Exchangeable Share Consideration representing the total Liquidation Amount. On
and after the Liquidation Date, the holders of the Exchangeable Shares shall
cease to be holders of such Exchangeable Shares and shall not be entitled to
exercise any of the rights of holders in respect thereof (including any rights
under the Voting and Exchange Trust Agreement), other than the right to receive
their proportionate part of the total Liquidation Amount, unless payment of the
total Liquidation Amount for such Exchangeable Shares shall not be made upon
presentation and surrender of share certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall remain
unaffected until the total Liquidation Amount to which such holders are entitled
shall have been paid to such holders in the manner hereinbefore provided. The
Company shall have the right at any time on or after the Liquidation Date to
deposit or cause to be deposited the Exchangeable Share Consideration in respect
of the Exchangeable Shares represented by certificates that have not at the
Liquidation Date been surrendered by the holders thereof in a custodial account
with any chartered bank or trust company in Canada. Upon such deposit being
made, the rights of the holders of Exchangeable Shares, after such deposit,
shall be limited to receiving their proportionate part of the total Liquidation
Amount for such Exchangeable Shares so deposited, against presentation and
surrender of the said certificates held by them, respectively, in accordance
with the foregoing provisions. Upon such payment or deposit of such Exchangeable
Share Consideration, the holders of the Exchangeable Shares shall thereafter be
considered and deemed for all purposes to be holders of the Duke Energy Common
Shares delivered to them or the custodian on their behalf.

         5.3 After the Company has satisfied its obligations to pay the holders
of the Exchangeable Shares the Liquidation Amount per Exchangeable Share
pursuant to Section 5.1 of these share provisions, such holders shall not be
entitled to share in any further distribution of the assets of the Company.

                                    ARTICLE 6

                   RETRACTION OF EXCHANGEABLE SHARES BY HOLDER

         6.1 A holder of Exchangeable Shares shall be entitled at any time,
subject to the exercise by Callco of the Retraction Call Right and otherwise
upon compliance with the provisions of this Article 6, to require the Company to
redeem any or all of the Exchangeable 


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   111
Shares registered in the name of such holder for an amount per share equal to
the Exchangeable Share Price applicable on the last Business Day prior to the
Retraction Date (the "RETRACTION PRICE"), which shall be satisfied in full by
the Company causing to be delivered to such holder the Exchangeable Share
Consideration representing the Retraction Price. To effect such redemption, the
holder shall present and surrender at the registered office of the Company or at
any office of the Transfer Agent as may be specified by the Company by notice to
the holders of Exchangeable Shares, the certificate or certificates representing
the Exchangeable Shares which the holder desires to have the Company redeem,
together with such other documents and instruments as may be required to effect
a transfer of Exchangeable Shares under the CBCA and the articles and bylaws of
the Company and such additional documents and instruments as the Transfer Agent
and the Company may reasonably require, and together with a duly executed
statement (the "RETRACTION REQUEST") in the form of Schedule A hereto or in such
other form as may be acceptable to the Company:

               (a) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such certificate or
certificates (the "RETRACTED SHARES") redeemed by the Company;

               (b) stating the Business Day on which the holder desires to have
the Company redeem the Retracted Shares (the "RETRACTION DATE"), provided that
the Retraction Date shall be not less than 10 Business Days nor more than 15
Business Days after the date on which the Retraction Request is received by the
Company and further provided that, in the event that no such Business Day is
specified by the holder in the Retraction Request, the Retraction Date shall be
deemed to be the 15th Business Day after the date on which the Retraction
Request is received by the Company; and

               (c) acknowledging the overriding right (the "RETRACTION CALL
RIGHT") of Callco to purchase all but not less than all the Retracted Shares
directly from the holder and that the Retraction Request shall be deemed to be a
revocable offer by the holder to sell the Retracted Shares to Callco in
accordance with the Retraction Call Right on the terms and conditions set out in
Section 6.3 below.

         6.2 Subject to the exercise by Callco of the Retraction Call Right,
upon receipt by the Company or the Transfer Agent in the manner specified in
Section 6.1 of a certificate or certificates representing the number of
Retracted Shares, together with a Retraction Request and such additional
documents and instruments as the Transfer Agent and the Company may reasonably
require, and provided that the Retraction Request is not revoked by the holder
in the manner specified in Section 6.7, the Company shall redeem the Retracted
Shares effective at the close of business on the Retraction Date and shall cause
to be delivered to such holder the total Retraction Price with respect to such
shares in accordance with Section 6.4. If only a part of the Exchangeable Shares
represented by any certificate is redeemed (or purchased by Callco pursuant to
the Retraction Call Right), a new certificate for the balance of such
Exchangeable Shares shall be issued to the holder at the expense of the Company.

         6.3 Upon receipt by the Company of a Retraction Request, the Company
shall immediately notify Callco thereof and shall provide to Callco a copy of
the Retraction Request. In order to exercise the Retraction Call Right, Callco
must notify the Company of its 


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   112
determination to do so (the "CALLCO CALL NOTICE") within five Business Days of
notification to Callco by the Company of the receipt by the Company of the
Retraction Request. If Callco does not so notify the Company within such five
Business Day period, the Company will notify the holder as soon as possible
thereafter that Callco will not exercise the Retraction Call Right. If Callco
delivers the Callco Call Notice within such five Business Day period, and
provided that the Retraction Request is not revoked by the holder in the manner
specified in Section 6.7, the Retraction Request shall thereupon be considered
only to be an offer by the holder to sell all but not less than all the
Retracted Shares to Callco in accordance with the Retraction Call Right. In such
event, the Company shall not redeem the Retracted Shares and Callco shall
purchase from such holder and such holder shall sell to Callco on the Retraction
Date all but not less than all the Retracted Shares for a purchase price (the
"PURCHASE PRICE") per share equal to the Retraction Price, which, as set forth
in Section 6.4, shall be fully paid and satisfied by the delivery by or on
behalf of Callco, of the Exchangeable Share Consideration representing the total
Purchase Price. For the purposes of completing a purchase pursuant to the
Retraction Call Right, Callco shall deposit with the Transfer Agent, on or
before the Retraction Date, the Exchangeable Share Consideration representing
the total Purchase Price. Provided that Callco has complied with Section 6.4,
the closing of the purchase and sale of the Retracted Shares pursuant to the
Retraction Call Right shall be deemed to have occurred as at the close of
business on the Retraction Date and, for greater certainty, no redemption by the
Company of such Retracted Shares shall take place on the Retraction Date. In the
event that Callco does not deliver a CALLCO Call Notice within such five
Business Day period, and provided that the Retraction Request is not revoked by
the holder in the manner specified in Section 6.7, the Company shall redeem the
Retracted Shares on the Retraction Date and in the manner otherwise contemplated
in this Article 6.

         6.4 The Company or Callco, as the case may be, shall deliver or cause
the Transfer Agent to deliver to the relevant holder, at the address of the
holder recorded in the register of the Company for the Exchangeable Shares or at
the address specified in the holder's Retraction Request or by holding for
pick-up by the holder at the registered office of the Company or at any office
of the Transfer Agent as may be specified by the Company by notice to such
holder of Exchangeable Shares, the Exchangeable Share Consideration representing
the total Retraction Price or the total Purchase Price, as the case may be, and
such delivery of such Exchangeable Share Consideration to the Transfer Agent
shall be deemed to be payment of and shall satisfy and discharge all liability
for the total Retraction Price or total Purchase Price, as the case may be, to
the extent that the same is represented by such Exchangeable Share
Consideration.

         6.5 On and after the close of business on the Retraction Date, the
holder of the Retracted Shares shall cease to be a holder of such Retracted
Shares and shall not be entitled to exercise any of the rights of a holder in
respect thereof, other than the right to receive the total Retraction Price or
total Purchase Price, as the case may be, unless upon presentation and surrender
of certificates in accordance with the foregoing provisions, payment of the
total Retraction Price or the total Purchase Price, as the case may be, shall
not be made as provided in Section 6.4, in which case the rights of such holder
shall remain unaffected until the total Retraction Price or the total Purchase
Price, as the case may be, has been paid in the manner hereinbefore provided. On
and after the close of business on the Retraction Date, provided that
presentation and surrender of certificates and payment of the total Retraction
Price or the total Purchase Price, as the case may be, has been made in
accordance with the foregoing provisions, 


                                      1-13
   113
the holder of the Retracted Shares so redeemed by the Company or purchased by
Callco shall thereafter be considered and deemed for all purposes to be the
holder of the Duke Energy Common Shares delivered to it.

         6.6 Notwithstanding any other provision of this Article 6, the Company
shall not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to solvency requirements or other provisions of applicable law. If
the Company believes that on any Retraction Date it would not be permitted by
any of such provisions to redeem the Retracted Shares tendered for redemption on
such date, and provided that Callco shall not have exercised the Retraction Call
Right with respect to the Retracted Shares, the Company shall only be obligated
to redeem Retracted Shares specified by a holder in a Retraction Request to the
extent of the maximum number that may be so redeemed (rounded down to a whole
number of shares) as would not be contrary to such provisions and shall notify
the holder at least two Business Days prior to the Retraction Date as to the
number of Retracted Shares which will not be redeemed by the Company. In any
case in which the redemption by the Company of Retracted Shares would be
contrary to solvency requirements or other provisions of applicable law, the
Company shall redeem the maximum number of Exchangeable Shares which the Board
of Directors determines the Company is permitted to redeem as of the Retraction
Date on a pro rata basis and shall issue to each holder of Retracted Shares a
new certificate, at the expense of the Company, representing the Retracted
Shares not redeemed by the Company pursuant to Section 6.2. Provided that the
Retraction Request is not revoked by the holder in the manner specified in
Section 6.7 and Callco does not exercise the Retraction Call Right, the holder
of any such Retracted Shares not redeemed by the Company pursuant to Section 6.2
as a result of solvency requirements or other provisions of applicable law shall
be deemed by giving the Retraction Request to have instructed the Trustee to
require Duke Energy to purchase such Retracted Shares from such holder on the
Retraction Date or as soon as practicable thereafter on payment by Duke Energy
to such holder of the Retraction Price for each such Retracted Share, all as
more specifically provided in the Voting and Exchange Trust Agreement.

         6.7 A holder of Retracted Shares may, by notice in writing given by the
holder to the Company before the close of business on the Business Day
immediately preceding the Retraction Date, withdraw its Retraction Request, in
which event such Retraction Request shall be null and void and, for greater
certainty, the revocable offer constituted by the Retraction Request to sell the
Retracted Shares to Callco shall be deemed to have been revoked.

                                    ARTICLE 7

                REDEMPTION OF EXCHANGEABLE SHARES BY THE COMPANY

         7.1 Subject to applicable law, and provided Callco has not exercised
the Redemption Call Right, the Company shall on the Redemption Date redeem all
but not less than all of the then outstanding Exchangeable Shares for an amount
per share equal to the Exchangeable Share Price applicable on the last Business
Day prior to the Redemption Date (the "REDEMPTION PRICE").



                                      1-14
   114
         7.2 In any case of a redemption of Exchangeable Shares under this
Article 7, the Company shall, at least 45 days before the Redemption Date (other
than a Redemption Date established in connection with a Duke Energy Control
Transaction, an Exchangeable Share Voting Event or an Exempt Exchangeable Share
Voting Event), send or cause to be sent to each holder of Exchangeable Shares a
notice in writing of the redemption by the Company or the purchase by Callco
under the Redemption Call Right, as the case may be, of the Exchangeable Shares
held by such holder. In the case of a Redemption Date established in connection
with a Duke Energy Control Transaction, an Exchangeable Share Voting Event or an
Exempt Exchangeable Share Voting Event, the written notice of redemption by the
Company or the purchase by Callco under the Redemption Call Right will be sent
on or before the Redemption Date, on as many days prior written notice as may be
determined by the Board of Directors to be reasonably practicable in the
circumstances. In any such case, such notice shall set out the formula for
determining the Redemption Price or the Redemption Call Purchase Price, as the
case may be, the Redemption Date and, if applicable, particulars of the
Redemption Call Right. In the case of any notice given in connection with a
possible Redemption Date, such notice will be given contingently and will be
withdrawn if the contingency does not occur.

         7.3 On or after the Redemption Date and subject to the exercise by
Callco of the Redemption Call Right, the Company shall cause to be delivered to
the holders of the Exchangeable Shares to be redeemed the Redemption Price for
each such Exchangeable Share upon presentation and surrender at the registered
office of the Company or at any office of the Transfer Agent as may be specified
by the Company in the notice described in Section 7.2 of the certificates
representing such Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the CBCA and the articles and by-laws of the Company and such additional
documents and instruments as the Transfer Agent and the Company may reasonably
require. Payment of the total Redemption Price for such Exchangeable Shares
shall be made by delivery to each holder, at the address of the holder recorded
in the securities register of the Company or by holding for pick-up by the
holder at the registered office of the Company or at any office of the Transfer
Agent as may be specified by the Company in such notice, on behalf of the
Company of the Exchangeable Share Consideration representing the total
Redemption Price. On and after the Redemption Date, the holders of the
Exchangeable Shares called for redemption shall cease to be holders of such
Exchangeable Shares and shall not be entitled to exercise any of the rights of
holders in respect thereof, other than the right to receive their proportionate
part of the total Redemption Price, unless payment of the total Redemption Price
for such Exchangeable Shares shall not be made upon presentation and surrender
of certificates in accordance with the foregoing provisions, in which case the
rights of the holders shall remain unaffected until the total Redemption Price
has been paid in the manner hereinbefore provided. The Company shall have the
right at any time after the sending of notice of its intention to redeem the
Exchangeable Shares as aforesaid to deposit or cause to be deposited the
Exchangeable Share Consideration with respect to the Exchangeable Shares so
called for redemption, or of such of the said Exchangeable Shares represented by
certificates that have not at the date of such deposit been surrendered by the
holders thereof in connection with such redemption, in a custodial account with
any chartered bank or trust company in Canada named in such notice. Upon the
later of such deposit being made and the Redemption Date, the Exchangeable
Shares in respect whereof such deposit shall have been made shall be redeemed
and the rights of the holders thereof after such deposit or Redemption Date, as
the case may be, shall be limited to receiving their proportionate part of the


                                      1-15
   115
total Redemption Price for such Exchangeable Shares so deposited, against
presentation and surrender of the said certificates held by them, respectively,
in accordance with the foregoing provisions. Upon such payment or deposit of
such Exchangeable Share Consideration, the holders of the Exchangeable Shares
shall thereafter be considered and deemed for all purposes to be holders of the
Duke Energy Common Shares delivered to them or the custodian on their behalf.

                                    ARTICLE 8

                            PURCHASE FOR CANCELLATION

         8.1 Subject to applicable law and the articles of the Company and
notwithstanding Section 8.2, the Company may at any time and from time to time
purchase for cancellation all or any part of the Exchangeable Shares by private
agreement with any holder of Exchangeable Shares.

         8.2 Subject to applicable law and the articles of the Company, the
Company may at any time and from time to time purchase for cancellation all or
any part of the outstanding Exchangeable Shares by tender to all the holders of
record of Exchangeable Shares then outstanding or through the facilities of any
stock exchange on which the Exchangeable Shares are listed or quoted at any
price per share together with an amount equal to all declared and unpaid
dividends thereon for which the record date has occurred prior to the date of
purchase. If in response to an invitation for tenders under the provisions of
this Section 8.2, more Exchangeable Shares are tendered at a price or prices
acceptable to the Company than the Company is prepared to purchase, the
Exchangeable Shares to be purchased by the Company shall be purchased as nearly
as may be pro rata according to the number of shares tendered by each holder who
submits a tender to the Company, provided that when shares are tendered at
different prices, the pro rating shall be effected (disregarding fractions) only
with respect to the shares tendered at the price at which more shares were
tendered than the Company is prepared to purchase after the Company has
purchased all the shares tendered at lower prices. If only part of the
Exchangeable Shares represented by any certificate shall be purchased, a new
certificate for the balance of such shares shall be issued at the expense of the
Company.

                                    ARTICLE 9

                                  VOTING RIGHTS

         9.1 Except as required by applicable law and by Article 10, Section
11.1 and Section 12.2, the holders of the Exchangeable Shares shall not be
entitled as such to receive notice of or to attend any meeting of the
shareholders of the Company or to vote at any such meeting.

                                   ARTICLE 10

                             AMENDMENT AND APPROVAL

         10.1 The rights, privileges, restrictions and conditions attaching to
the Exchangeable Shares may be added to, changed or removed but only with the
approval of the holders of the Exchangeable Shares given as hereinafter
specified.


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   116
         10.2 Any approval given by the holders of the Exchangeable Shares to
add to, change or remove any right, privilege, restriction or condition
attaching to the Exchangeable Shares or any other matter requiring the approval
or consent of the holders of the Exchangeable Shares shall be deemed to have
been sufficiently given if it shall have been given in accordance with
applicable law subject to a minimum requirement that such approval be evidenced
by resolution passed by not less than 66 2/3% of the votes cast on such
resolution by holders represented in person or by proxy at a meeting of holders
of Exchangeable Shares duly called and held at which the holders of at least 25%
of the outstanding Exchangeable Shares at that time are present or represented
by proxy; provided that if at any such meeting the holders of at least 25% of
the outstanding Exchangeable Shares at that time are not present or represented
by proxy within one-half hour after the time appointed for such meeting, then
the meeting shall be adjourned to such date not less than five days thereafter
and to such time and place as may be designated by the Chair of such meeting. At
such adjourned meeting, the holders of Exchangeable Shares present or
represented by proxy thereat may transact the business for which the meeting was
originally called and a resolution passed thereat by the affirmative vote of not
less than 66 2/3% of the votes cast on such resolution by holders represented in
person or by proxy at such meeting shall constitute the approval or consent of
the holders of the Exchangeable Shares. For purposes of this section, any
spoiled votes, illegible votes, defective votes and abstentions shall be deemed
to be votes not cast.

                                   ARTICLE 11

                     RECIPROCAL CHANGES, ETC. IN RESPECT OF
                            DUKE ENERGY COMMON SHARES

         11.1 Each holder of an Exchangeable Share acknowledges that the Support
Agreement provides, in part, that Duke Energy will not, without the prior
approval of the Company and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2 of these share
provisions:

               (a) issue or distribute Duke Energy Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Duke Energy
Common Shares) to the holders of all or substantially all of the then
outstanding Duke Energy Common Shares by way of stock dividend or other
distribution, other than an issue of Duke Energy Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Duke Energy
Common Shares) to holders of Duke Energy Common Shares who (i) exercise an
option to receive dividends in Duke Energy Common Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Duke Energy
Common Shares) in lieu of receiving cash dividends, or (ii) pursuant to any
dividend reinvestment plan or scrip dividend;

               (b) issue or distribute rights, options or warrants to the
holders of all or substantially all of the then outstanding Duke Energy Common
Shares entitling them to subscribe for or to purchase Duke Energy Common Shares
(or securities exchangeable for or convertible into or carrying rights to
acquire Duke Energy Common Shares); or

               (c) issue or distribute to the holders of all or substantially
all of the then outstanding Duke Energy Common Shares:


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   117
                    (i) shares or securities of Duke Energy of any class other
than Duke Energy Common Shares (other than shares convertible into or
exchangeable for or carrying rights to acquire Duke Energy Common Shares);

                    (ii) rights, options or warrants other than those referred
to in Section 11.1(b) above;

                    (iii) evidences of indebtedness of Duke Energy; or

                    (iv) assets of Duke Energy,

unless the economic equivalent on a per share basis of such rights, options,
warrants, securities, shares, evidences of indebtedness or other assets is
issued or distributed simultaneously to holders of the Exchangeable Shares.

         11.2 Each holder of an Exchangeable Share acknowledges that the Support
Agreement further provides, in part, that Duke Energy will not without the prior
approval of the Company and the prior approval of the holders of the
Exchangeable Shares given in accordance with Section 10.2:

               (a) subdivide, redivide or change the then outstanding Duke
Energy Common Shares into a greater number of Duke Energy Common Shares;

               (b) reduce, combine, consolidate or change the then outstanding
Duke Energy Common Shares into a lesser number of Duke Energy Common Shares; or

               (c) reclassify or otherwise change the Duke Energy Common Shares
or effect an amalgamation, merger, reorganization or other transaction affecting
the Duke Energy Common Shares,

unless the same or an economically equivalent change shall simultaneously be
made to, or in the rights of the holders of, the Exchangeable Shares and such
change is permitted under applicable law. The Support Agreement further
provides, in part, that the aforesaid provisions of the Support Agreement shall
not be changed without the approval of the holders of the Exchangeable Shares
given in accordance with Section 10.2.

                                   ARTICLE 12

                 ACTIONS BY THE COMPANY UNDER SUPPORT AGREEMENT

         12.1 The Company will take all such actions and do all such things as
shall be necessary or advisable to perform and comply with and to ensure
performance and compliance by Duke Energy, Callco and the Company with all
provisions of the Support Agreement and the Voting Trust and Exchange Agreement
applicable to Duke Energy, Callco and the Company, respectively, in accordance
with the terms thereof including taking all such actions and doing all such
things as shall be necessary or advisable to enforce to the fullest extent
possible for the direct benefit of the Company all rights and benefits in favour
of the Company under or pursuant thereto.


                                      1-18
   118
         12.2 The Company shall not propose, agree to or otherwise give effect
to any amendment to, or waiver or forgiveness of its rights or obligations
under, the Support Agreement or the Voting Trust and Exchange Agreement without
the approval of the holders of the Exchangeable Shares given in accordance with
Section 10.2 other than such amendments, waivers and/or forgiveness as may be
necessary or advisable for the purposes of:

               (a) adding to the covenants of the other parties to such
agreement for the protection of the Company or the holders of the Exchangeable
Shares thereunder;

               (b) making such provisions or modifications not inconsistent with
such agreement as may be necessary or desirable with respect to matters or
questions arising thereunder which, in the good faith opinion of the Board of
Directors, it may be expedient to make, provided that the Board of Directors
shall be of the good faith opinion, after consultation with counsel, that such
provisions and modifications will not be prejudicial to the interests of the
holders of the Exchangeable Shares; or

               (c) making such changes in or corrections to such agreement
which, on the advice of counsel to the Company, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error contained therein, provided that
the Board of Directors shall be of the good faith opinion, after consultation
with counsel, that such changes or corrections will not be prejudicial to the
interests of the holders of the Exchangeable Shares.

                                   ARTICLE 13

                     LEGEND; CALL RIGHTS; WITHHOLDING RIGHTS

         13.1 The certificates evidencing the Exchangeable Shares shall contain
or have affixed thereto a legend in form and on terms approved by the Board of
Directors, with respect to the Support Agreement, the provisions of the Plan of
Arrangement relating to the Liquidation Call Right and the Redemption Call
Right, and the Voting and Exchange Trust Agreement (including the provisions
with respect to the voting rights, exchange right and automatic exchange
thereunder) and the Retraction Call Right.

         13.2 Each holder of an Exchangeable Share, whether of record or
beneficial, by virtue of becoming and being such a holder shall be deemed to
acknowledge each of the Liquidation Call Right, the Retraction Call Right and
the Redemption Call Right, in each case, in favour of Callco, and the overriding
nature thereof in connection with the liquidation, dissolution or winding-up of
the Company or any other distribution of the assets of the Company among its
shareholders for the purpose of winding-up its affairs, or the retraction or
redemption of Exchangeable Shares, as the case may be, and to be bound thereby
in favour of Callco as therein provided.

         13.3 The Company, Callco, Duke Energy and the Transfer Agent shall be
entitled to deduct and withhold from any dividend or consideration otherwise
payable to any holder of Exchangeable Shares such amounts as the Company,
Callco, Duke Energy or the Transfer Agent is required to deduct and withhold
with respect to such payment under the Income Tax Act (Canada), the United
States Internal Revenue Code of 1986 or any provision of provincial, state,


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territorial, local or foreign tax law, in each case, as amended. To the extent
that amounts are so withheld, such withheld amounts shall be treated for all
purposes hereof as having been paid to the holder of the Exchangeable Shares in
respect of which such deduction and withholding was made, provided that such
withheld amounts are actually remitted to the appropriate taxing authority. To
the extent that the amount so required or permitted to be deducted or withheld
from any payment to a holder exceeds the cash portion of the consideration
otherwise payable to the holder, the Company, Callco, Duke Energy and the
Transfer Agent are hereby authorized to sell or otherwise dispose of such
portion of the consideration as is necessary to provide sufficient funds to the
Company, Callco, Duke Energy or the Transfer Agent, as the case may be, to
enable it to comply with such deduction or withholding requirement and the
Company, Callco, Duke Energy or the Transfer Agent shall notify the holder
thereof and remit any unapplied balance of the net proceeds of such sale.

                                   ARTICLE 14

                                     GENERAL

         14.1 Any notice, request or other communication to be given to the
Company by a holder of Exchangeable Shares shall be in writing and shall be
valid and effective if given by mail (postage prepaid) or by telecopy or by
delivery to the registered office of the Company and addressed to the attention
of the Secretary of the Company. Any such notice, request or other
communication, if given by mail, telecopy or delivery, shall only be deemed to
have been given and received upon actual receipt thereof by the Company.

         14.2 Any presentation and surrender by a holder of Exchangeable Shares
to the Company or the Transfer Agent of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding-up of the
Company or the retraction or redemption of Exchangeable Shares shall be made by
registered mail (postage prepaid) or by delivery to the registered office of the
Company or to such office of the Transfer Agent as may be specified by the
Company, in each case, addressed to the attention of the Secretary of the
Company. Any such presentation and surrender of certificates shall only be
deemed to have been made and to be effective upon actual receipt thereof by the
Company or the Transfer Agent, as the case may be. Any such presentation and
surrender of certificates made by registered mail shall be at the sole risk of
the holder mailing the same.

         14.3 Any notice, request or other communication to be given to a holder
of Exchangeable Shares by or on behalf of the Company shall be in writing and
shall be valid and effective if given by mail (postage prepaid) or by delivery
to the address of the holder recorded in the register of the Company or, in the
event of the address of any such holder not being so recorded, then at the last
address of such holder known to the Company. Any such notice, request or other
communication, if given by mail, shall be deemed to have been given and received
on the third Business Day following the date of mailing and, if given by
delivery, shall be deemed to have been given and received on the date of
delivery. Accidental failure or omission to give any notice, request or other
communication to one or more holders of Exchangeable Shares shall not invalidate
or otherwise alter or affect any action or proceeding intended to be taken by
the Company pursuant thereto.


                                      1-20
   120
         14.4 Subject to the requirements of National Policy Statement 41 and
any successor policy statement or rule of the Canadian Securities Administrators
or other applicable law, for greater certainty, the Company shall not be
required for any purpose under these share provisions to recognize or take
account of Persons who are not recorded as such in the securities register for
the Exchangeable Shares.

         14.5 If the Company determines that mail service is or is threatened to
be interrupted at the time when the Company is required or elects to give any
notice to the holders of Exchangeable Shares hereunder, the Company shall,
notwithstanding the provisions hereof, give such notice by means of publication
in The Globe and Mail; national edition, or any other English language daily
newspaper or newspapers of general circulation in Canada and in a French
language daily newspaper of general circulation in the Province of Quebec, once
in each of two successive weeks, and notice so published shall be deemed to have
been given on the latest date on which the first publication has taken place.
If, by reason of any actual or threatened interruption of mail service due to
strike, lock-out or otherwise, any notice to be given to the Company would be
unlikely to reach its destination in a timely manner, such notice shall be valid
and effective only if delivered personally to the Company in accordance with
Section 14.1 or 14.2, as the case may be.


                                      1-21
   121
                                   SCHEDULE A

                               RETRACTION REQUEST

               [TO BE PRINTED ON EXCHANGEABLE SHARE CERTIFICATES]

To 3946509 Canada Inc. ("Exchangeco") and 3058368 Nova Scotia Company ("Callco")

         This notice is given pursuant to Article 6 of the rights, privileges,
restrictions and conditions (the "SHARE PROVISIONS") attaching to the
Exchangeable Shares of Exchangeco represented by this certificate and all
capitalized words and expressions used in this notice that are defined in the
Share Provisions have the meanings ascribed to such words and expressions in
such Share Provisions.

         The undersigned hereby notifies Exchangeco that, subject to the
Retraction Call Right referred to below, the undersigned desires to have
Exchangeco redeem in accordance with Article 6 of the Share Provisions:

[ ]        all share(s) represented by this certificate; or

[ ]        _________ share(s) only represented by this certificate.

         The undersigned hereby notifies Exchangeco that the Retraction Date 
shall be ___________________________.

NOTE:       The Retraction Date must be a Business Day and must not be less than
            10 Business Days nor more than 15 Business Days after the date upon
            which this notice is received by Exchangeco. If no such Business Day
            is specified above, the Retraction Date shall be deemed to be the
            15th Business Day after the date on which this notice is received by
            Exchangeco.

         The undersigned acknowledges the overriding Retraction Call Right of
Callco to purchase all but not less than all the Retracted Shares from the
undersigned and that this notice is and shall be deemed to be a revocable offer
by the undersigned to sell the Retracted Shares to Callco in accordance with the
Retraction Call Right on the Retraction Date for the Purchase Price and on the
other terms and conditions set out in Section 6.3 of the Share Provisions. This
Retraction Request, and this offer to sell the Retracted Shares to Callco, may
be revoked and withdrawn by the undersigned only by notice in writing given to
Exchangeco at any time before the close of business on the Business Day
immediately preceding the Retraction Date.

         The undersigned acknowledges that if, as a result of solvency
provisions of applicable law, Exchangeco is unable to redeem all Retracted
Shares, the undersigned will be deemed to have exercised the Exchange Right (as
defined in the Voting and Exchange Trust Agreement) so as to require Duke Energy
to purchase the unredeemed Retracted Shares.


                                      A-1
   122
         The undersigned hereby represents and warrants to Callco and Exchangeco
that the undersigned:

[ ]        is
                  (select one)
[ ]        is not

a resident in Canada for purposes of the Income Tax Act (Canada). THE
UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS A RESIDENT IN CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN TAX MAY
BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON THE REDEMPTION OR PURCHASE OF
THE RETRACTED SHARES.

         The undersigned hereby represents and warrants to Callco and Exchangeco
that the undersigned has good title to, and owns, the share(s) represented by
this certificate to be acquired by Callco or Exchangeco, as the case may be,
free and clear of all liens, claims and encumbrances.


--------     -------------------------------------    --------------------------
 (Date)            (Signature of Shareholder)          (Guarantee of Signature)

[ ]    Please check box if the securities and any cheque(s) resulting from the
       retraction or purchase of the Retracted Shares are to be held for pick-up
       by the shareholder from the Transfer Agent, failing which the securities
       and any cheque(s) will be mailed to the last address of the shareholder
       as it appears on the register.

NOTE:  This panel must be completed and this certificate, together with such
       additional documents as the Transfer Agent may require, must be deposited
       with the Transfer Agent. The securities and any cheque(s) resulting from
       the retraction or purchase of the Retracted Shares will be issued and
       registered in, and made payable to, respectively, the name of the
       shareholder as it appears on the register of Exchangeco and the
       securities and any cheque(s) resulting from such retraction or purchase
       will be delivered to such shareholder as indicated above, unless the form
       appearing immediately below is duly completed.

Date:
     ------------------

Name of Person in Whose Name Securities
or Cheque(s) Are to be Registered, Issued or
Delivered (please print):
                          ------------------------------------------------------

Street Address or P.O. Box:                                                     
                            ----------------------------------------------------

Signature of Shareholder:                                                       
                          ------------------------------------------------------

City, Province and Postal Code:                                                 
                                ------------------------------------------------

Signature Guaranteed by:                                                        
                         -------------------------------------------------------


                                      A-2
   123
NOTE:  If this Retraction Request is for less than all of the shares represented
       by this certificate, a certificate representing the remaining share(s) of
       Exchangeco represented by this certificate will be issued and registered
       in the name of the shareholder as it appears on the register of
       Exchangeco, unless the Share Transfer Power on the share certificate is
       duly completed in respect of such share(s).



                                      A-3
   124


                                   SCHEDULE F

                            FORM OF SUPPORT AGREEMENT



         SUPPORT AGREEMENT ("AGREEMENT") made as of the ___ day of _____, 200_.

B E T W E E N:

            DUKE ENERGY CORPORATION,
            a corporation existing under the laws of the State of North Carolina
            (hereinafter referred to as "DUKE ENERGY"),

                                                              OF THE FIRST PART,

                                     - and -

            3058368 NOVA SCOTIA COMPANY, an unlimited liability company
            existing under the laws of the Province of Nova Scotia
            (hereinafter referred to as "CALLCO"),
                                                             OF THE SECOND PART,

                                     - and -

            3946509 CANADA INC.,
            a company existing under the laws of Canada
            (hereinafter referred to as "EXCHANGECO"),
                                                              OF THE THIRD PART.

         WHEREAS, in connection with a combination agreement (the "COMBINATION
AGREEMENT") made as of September 20, 2001 among Duke Energy, Exchangeco, Callco
and Westcoast Energy Inc., a corporation existing under the laws of Canada
("WESTCOAST"), Exchangeco is to issue exchangeable shares (the "EXCHANGEABLE
SHARES") to certain holders of common shares in the capital of Westcoast
pursuant to the plan of arrangement (the "ARRANGEMENT") contemplated by the
Combination Agreement; and

         WHEREAS, pursuant to the Combination Agreement, Duke Energy and
Exchangeco have agreed to execute a support agreement substantially in the form
of this Agreement on the Effective Date (as defined in the Combination
Agreement);

         NOW, THEREFORE, in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree as follows:


   125

                                   ARTICLE 1
                                 INTERPRETATION

1.1      DEFINED TERMS

         Each term denoted herein by initial capital letters and not otherwise
defined herein shall have the meaning ascribed thereto in the rights,
privileges, restrictions and conditions (collectively, the "EXCHANGEABLE SHARE
PROVISIONS") attaching to the Exchangeable Shares attached as Appendix 1 to the
Arrangement and as set out in the Articles of Arrangement of Westcoast, unless
the context requires otherwise.

1.2      INTERPRETATION NOT AFFECTED BY HEADINGS

         The division of this agreement into articles, sections and other
portions and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof. Unless otherwise
indicated, all references to an "Article" or "Section" followed by a number
refer to the specified Article or Section of this Agreement. The terms "this
Agreement," "hereof," "herein" and "hereunder" and similar expressions refer to
this agreement and not to any particular Article, Section or other portion
hereof.

1.3      RULES OF CONSTRUCTION

         Unless otherwise specifically indicated or the context otherwise
requires, (a) all references to "dollars" or "$" mean United States dollars, (b)
words importing the singular shall include the plural and vice versa and words
importing any gender shall include all genders, and (c) "include," "includes"
and "including" shall be deemed to be followed by the words "without
limitation."

1.4      DATE FOR ANY ACTION

         If the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such action shall
be required to be taken on the next succeeding day that is a Business Day.

                                   ARTICLE 2
                     COVENANTS OF DUKE ENERGY AND EXCHANGECO

2.1      COVENANTS REGARDING EXCHANGEABLE SHARES

         So long as any Exchangeable Shares not owned by Duke Energy or its
Affiliates are outstanding, Duke Energy will:

         (a)  not declare or pay any dividend on the Duke Energy Common Shares
              unless (i) Exchangeco shall (w) on the same day declare or pay, as
              the case may be, an equivalent dividend (as provided for in the
              Exchangeable Share Provisions) on the Exchangeable Shares (an
              "Equivalent Dividend") and (x) Exchangeco shall have sufficient
              money or other assets or authorized but unissued securities
              available to enable the due declaration and the due and punctual
              payment, in accordance with 


                                       -2-
                               Support Agreement

   126

              applicable law, of any such Equivalent Dividend, or (ii)
              Exchangeco shall (y) subdivide the Exchangeable Shares in lieu of
              stock dividend thereon (as provided for in the Exchangeable Share
              Provisions) (an "Equivalent Stock Subdivision"), and (z) have
              sufficient authorized but unissued securities available to enable
              the Equivalent Stock Subdivision;

         (b)  advise Exchangeco sufficiently in advance of the declaration by
              Duke Energy of any dividend on Duke Energy Common Shares and take
              all such other actions as are reasonably necessary, in cooperation
              with Exchangeco, to ensure that (i) the respective declaration
              date, record date and payment date for an Equivalent Dividend on
              the Exchangeable Shares shall be the same as the declaration date,
              record date and payment date for the corresponding dividend on the
              Duke Energy Common Shares, or (ii) the record date and effective
              date for an Equivalent Stock Subdivision shall be the same as the
              record date and payment date for the stock dividend on the Duke
              Energy Common Shares;

         (c)  ensure that the record date for any dividend declared on Duke
              Energy Common Shares is not less than 10 Business Days after the
              declaration date of such dividend;

         (d)  take all such actions and do all such things as are reasonably
              necessary or desirable to enable and permit Exchangeco, in
              accordance with applicable law, to pay and otherwise perform its
              obligations with respect to the satisfaction of the Liquidation
              Amount, the Retraction Price or the Redemption Price in respect of
              each issued and outstanding Exchangeable Share (other than
              Exchangeable Shares owned by Duke Energy or its Affiliates) upon
              the liquidation, dissolution or winding-up of Exchangeco or any
              other distribution of the assets of Exchangeco among its
              shareholders for the purpose of winding-up its affairs, the
              delivery of a Retraction Request by a holder of Exchangeable
              Shares or a redemption of Exchangeable Shares by Exchangeco, as
              the case may be, including all such actions and all such things as
              are necessary or desirable to enable and permit Exchangeco to
              cause to be delivered Duke Energy Common Shares to the holders of
              Exchangeable Shares in accordance with the provisions of Article
              5, 6 or 7, as the case may be, of the Exchangeable Share
              Provisions; and

         (e)  take all such actions and do all such things as are reasonably
              necessary or desirable to enable and permit Callco, in accordance
              with applicable law, to perform its obligations arising upon the
              exercise by it of the Liquidation Call Right, the Retraction Call
              Right or the Redemption Call Right, including all such actions and
              all such things as are necessary or desirable to enable and permit
              Callco to cause to be delivered Duke Energy Common Shares to the
              holders of Exchangeable Shares in accordance with the provisions
              of the Liquidation Call Right, the Retraction Call Right or the
              Redemption Call Right, as the case may be.




                                       -3-
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   127

2.2      SEGREGATION OF FUNDS

         Duke Energy will cause Exchangeco to deposit a sufficient amount of
funds in a separate account of Exchangeco and segregate a sufficient amount of
such other assets and property as is necessary to enable Exchangeco to pay
dividends when due and to pay or otherwise satisfy its respective obligations
under Article 5, 6 or 7 of the Exchangeable Share Provisions, as applicable.

2.3      RESERVATION OF DUKE ENERGY COMMON SHARES

         Duke Energy hereby represents, warrants and covenants in favour of
Exchangeco and Callco that Duke Energy has either issued to the Trustee or
reserved for issuance and will, at all times while any Exchangeable Shares
(other than Exchangeable Shares held by Duke Energy or its Affiliates) are
outstanding, keep available, free from preemptive and other rights, out of its
authorized and unissued capital stock such number of Duke Energy Common Shares
(or other shares or securities into which Duke Energy Common Shares may be
reclassified or changed as contemplated by Section 2.7 hereof) (a) as is equal
to the sum of (i) the number of Exchangeable Shares issued and outstanding from
time to time and (ii) the number of Exchangeable Shares issuable upon the
exercise of all rights to acquire Exchangeable Shares outstanding from time to
time and (b) as are now and may hereafter be required to enable and permit Duke
Energy to meet its obligations under the Voting and Exchange Trust Agreement and
under any other security or commitment pursuant to the Arrangement with respect
to which Duke Energy may now or hereafter be required to issue Duke Energy
Common Shares, to enable and permit Callco to meet its obligations arising upon
exercise by it of each of the Liquidation Call Right, the Retraction Call Right
and the Redemption Call Right and to enable and permit Exchangeco to meet its
obligations hereunder and under the Exchangeable Share Provisions.

2.4      NOTIFICATION OF CERTAIN EVENTS

         In order to assist Duke Energy in compliance with its obligations
hereunder and to permit Callco to exercise the Liquidation Call Right, the
Retraction Call Right and the Redemption Call Right, Exchangeco will notify Duke
Energy and Callco of each of the following events at the times set forth below:

         (a)  in the event of any determination by the Board of Directors of
              Exchangeco to institute voluntary liquidation, dissolution or
              winding-up proceedings with respect to Exchangeco or to effect any
              other distribution of the assets of Exchangeco among its
              shareholders for the purpose of winding up its affairs, at least
              60 days prior to the proposed effective date of such liquidation,
              dissolution, winding-up or other distribution;

         (b)  promptly, upon the earlier of receipt by Exchangeco of notice of
              and Exchangeco otherwise becoming aware of any threatened or
              instituted claim, suit, petition or other proceeding with respect
              to the involuntary liquidation, dissolution or winding-up of
              Exchangeco or to effect any other distribution of the assets of
              Exchangeco among its shareholders for the purpose of winding up
              its affairs;


                                       -4-
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   128


         (c)  promptly, upon receipt by Exchangeco of a Retraction Request;

         (d)  promptly following the date on which notice of redemption is given
              to holders of Exchangeable Shares, upon the determination of a
              Redemption Date in accordance with the Exchangeable Share
              Provisions; and

         (e)  promptly upon the issuance by Exchangeco of any Exchangeable
              Shares or rights to acquire Exchangeable Shares (other than the
              issuance of Exchangeable Shares and rights to acquire Exchangeable
              Shares in exchange for outstanding Westcoast Common Shares
              pursuant to the Arrangement).

2.5      DELIVERY OF DUKE ENERGY COMMON SHARES TO EXCHANGECO AND CALLCO

         In furtherance of its obligations under Sections 2.1(d) and (e) hereof,
upon notice from Exchangeco or Callco of any event that requires Exchangeco or
Callco to cause to be delivered Duke Energy Common Shares to any holder of
Exchangeable Shares, Duke Energy shall forthwith issue and deliver the requisite
number of Duke Energy Common Shares to be received by, and issued to or to the
order of, the former holder of the surrendered Exchangeable Shares, as
Exchangeco or Callco shall direct. All such Duke Energy Common Shares shall be
duly authorized, validly issued and fully paid and non-assessable and shall be
free and clear of any lien, claim or encumbrance. In consideration of the
issuance and delivery of such Duke Energy Common Share, Callco or Exchangeco, as
the case may be, shall pay a purchase price equal to the fair market value of
such Duke Energy Common Share.

2.6      QUALIFICATION OF DUKE ENERGY COMMON SHARES

         Duke Energy covenants that if any Duke Energy Common Shares (or other
shares or securities into which Duke Energy Common Shares may be reclassified or
changed as contemplated by Section 2.7 hereof) (other than Duke Energy Common
Shares held by the Trustee) to be issued and delivered hereunder (including for
greater certainty, pursuant to the Exchangeable Share Provisions, or pursuant to
the Exchange Right or the Automatic Exchange Rights (all as defined in the
Voting and Exchange Trust Agreement)) require registration or qualification
with, or approval of, or the filing of any document, including any prospectus or
similar document, the taking of any proceeding with, or the obtaining of any
order, ruling or consent from, any governmental or regulatory authority under
any Canadian or United States federal, provincial, territorial or state
securities or other law or regulation or pursuant to the rules and regulations
of any securities or other regulatory authority, or the fulfillment of any other
United States or Canadian legal requirement (collectively, the "APPLICABLE
LAWS") before such shares (or other shares or securities into which Duke Energy
Common Shares may be reclassified or changed as contemplated by Section 2.7
hereof) may be issued and delivered by Duke Energy at the direction of
Exchangeco or Callco, if applicable, to the holder of surrendered Exchangeable
Shares or in order that such shares (or other shares or securities into which
Duke Energy Common Shares may be reclassified or changed as contemplated by
Section 2.7 hereof) may be freely traded thereafter (other than any restrictions
of general application on transfer by reason of a holder being a "control
person" of Duke Energy for purposes of Canadian provincial securities law or an
"affiliate" of Duke Energy for purposes of United States federal or state
securities law), Duke Energy will use its reasonable best efforts and in good
faith expeditiously 



                                       -5-
                               Support Agreement

   129

take all such actions and do all such things as are necessary or desirable and
within its power to cause such Duke Energy Common Shares (or other shares or
securities into which Duke Energy Common Shares may be reclassified or changed
as contemplated by Section 2.7 hereof) to be and remain duly registered,
qualified or approved under United States and/or Canadian law, as the case may
be, to the extent expressly provided in the Combination Agreement. Duke Energy
will use its reasonable best efforts and in good faith expeditiously take all
such actions and do all such things as are reasonably necessary or desirable to
cause all Duke Energy Common Shares (or other shares or securities into which
Duke Energy Common Shares may be reclassified or changed as contemplated by
Section 2.7 hereof) (other than Duke Energy Common Shares held by the Trustee)
to be delivered hereunder to be listed, quoted or posted for trading on all
stock exchanges and quotation systems on which outstanding Duke Energy Common
Shares (or other shares or securities into which Duke Energy Common Shares may
be reclassified or changed as contemplated by Section 2.7 hereof) are listed and
are quoted or posted for trading at such time.

2.7      ECONOMIC EQUIVALENCE

         So long as any Exchangeable Shares not owned by Duke Energy or its
Affiliates are outstanding:

         (a)  Duke Energy will not, without prior approval of Exchangeco and the
              prior approval of the holders of the Exchangeable Shares given in
              accordance with Section 10.2 of the Exchangeable Share Provisions:

              (i)   issue or distribute Duke Energy Common Shares (or securities
                    exchangeable for or convertible into or carrying rights to
                    acquire Duke Energy Common Shares) to the holders of all or
                    substantially all of the then outstanding Duke Energy Common
                    Shares by way of stock dividend or other distribution, other
                    than an issue of Duke Energy Common Shares (or securities
                    exchangeable for or convertible into or carrying rights to
                    acquire Duke Energy Common Shares) to holders of Duke Energy
                    Common Shares who (A) exercise an option to receive
                    dividends in Duke Energy Common Shares (or securities
                    exchangeable for or convertible into or carrying rights to
                    acquire Duke Energy Common Shares) in lieu of receiving cash
                    dividends, or (B) pursuant to any dividend reinvestment plan
                    or scrip dividend; or

              (ii)  issue or distribute rights, options or warrants to the
                    holders of all or substantially all of the then outstanding
                    Duke Energy Common Shares entitling them to subscribe for or
                    to purchase Duke Energy Common Shares (or securities
                    exchangeable for or convertible into or carrying rights to
                    acquire Duke Energy Common Shares); or

              (iii) issue or distribute to the holders of all or substantially
                    all of the then outstanding Duke Energy Common Shares (A)
                    shares or securities of Duke Energy of any class other than
                    Duke Energy Common Shares (other than shares convertible
                    into or exchangeable for or carrying rights to acquire Duke
                    Energy Common Shares), (B) rights, options or warrants 


                                       -6-
                               Support Agreement

   130

                    other than those referred to in Section 2.7(a)(ii) above,
                    (C) evidences of indebtedness of Duke Energy or (D) assets
                    of Duke Energy,

              unless the economic equivalent on a per share basis of such
              rights, options, warrants, securities, shares, evidences of
              indebtedness or other assets is issued or distributed
              simultaneously to holders of the Exchangeable Shares.

         (b)  Duke Energy will not without the prior approval of Exchangeco and
              the prior approval of the holders of the Exchangeable Shares given
              in accordance with Section 10.2 of the Exchangeable Share
              Provisions:

              (i)   subdivide, redivide or change the then outstanding Duke
                    Energy Common Shares into a greater number of Duke Energy
                    Common Shares; or

              (ii)  reduce, combine, consolidate or change the then outstanding
                    Duke Energy Common Shares into a lesser number of Duke
                    Energy Common Shares; or

              (iii) reclassify or otherwise change Duke Energy Common Shares or
                    effect an amalgamation, merger, reorganization or other
                    transaction affecting the Duke Energy Common Shares,

              unless the same or an economically equivalent change shall
              simultaneously be made to, or in the rights of the holders of, the
              Exchangeable Shares.

         (c)  Duke Energy will ensure that the record date for any event
              referred to in Section 2.7(a) or 2.7(b) above, or (if no record
              date is applicable for such event) the effective date for any such
              event, is not less than five Business Days after the date on which
              such event is declared or announced by Duke Energy (with
              contemporaneous notification thereof by Duke Energy to
              Exchangeco).

         (d)  The Board of Directors of Exchangeco shall determine, in good
              faith and in its sole discretion, economic equivalence for the
              purposes of any event referred to in Section 2.7(a) or 2.7(b)
              above and each such determination shall be conclusive and binding
              on Duke Energy. In making each such determination, the following
              factors shall, without excluding other factors determined by the
              Board of Directors of Exchangeco to be relevant, be considered by
              the Board of Directors of Exchangeco:

              (i)   in the case of any stock dividend or other distribution
                    payable in Duke Energy Common Shares, the number of such
                    shares issued in proportion to the number of Duke Energy
                    Common Shares previously outstanding;

              (ii)  in the case of the issuance or distribution of any rights,
                    options or warrants to subscribe for or purchase Duke Energy
                    Common Shares (or securities exchangeable for or convertible
                    into or carrying rights to acquire Duke Energy Common
                    Shares), the relationship between the exercise price of each
                    such right, option or warrant and the Current Market Price;



                                       -7-
                               Support Agreement

   131


              (iii) in the case of the issuance or distribution of any other
                    form of property (including any shares or securities of Duke
                    Energy of any class other than Duke Energy Common Shares,
                    any rights, options or warrants other than those referred to
                    in Section 2.7(d)(ii) above, any evidences of indebtedness
                    of Duke Energy or any assets of Duke Energy), the
                    relationship between the fair market value (as determined by
                    the Board of Directors of Exchangeco in the manner above
                    contemplated) of such property to be issued or distributed
                    with respect to each outstanding Duke Energy Common Share
                    and the Current Market Price;

              (iv)  in the case of any subdivision, redivision or change of the
                    then outstanding Duke Energy Common Shares into a greater
                    number of Duke Energy Common Shares or the reduction,
                    combination, consolidation or change of the then outstanding
                    Duke Energy Common Shares into a lesser number of Duke
                    Energy Common Shares or any amalgamation, merger,
                    reorganization or other transaction affecting Duke Energy
                    Common Shares, the effect thereof upon the then outstanding
                    Duke Energy Common Shares; and

              (v)   in all such cases, the general taxation consequences of the
                    relevant event to holders of Exchangeable Shares to the
                    extent that such consequences may differ from the taxation
                    consequences to holders of Duke Energy Common Shares as a
                    result of differences between taxation laws of Canada and
                    the United States (except for any differing consequences
                    arising as a result of differing marginal taxation rates and
                    without regard to the individual circumstances of holders of
                    Exchangeable Shares).

         (e)  Exchangeco agrees that, to the extent required, upon due notice
              from Duke Energy, Exchangeco will use its best efforts to take or
              cause to be taken such steps as may be necessary for the purposes
              of ensuring that appropriate dividends are paid or other
              distributions are made by Exchangeco, or subdivisions, redivisions
              or changes are made to the Exchangeable Shares, in order to
              implement the required economic equivalent with respect to the
              Duke Energy Common Shares and Exchangeable Shares as provided for
              in this Section 2.7.

2.8      TENDER OFFERS

         In the event that a tender offer, share exchange offer, issuer bid,
take-over bid or similar transaction with respect to Duke Energy Common Shares
(an "OFFER") is proposed by Duke Energy or is proposed to Duke Energy or its
shareholders and is recommended by the Board of Directors of Duke Energy, or is
otherwise effected or to be effected with the consent or approval of the Board
of Directors of Duke Energy, and the Exchangeable Shares are not redeemed by
Exchangeco or purchased by Callco pursuant to the Redemption Call Right, Duke
Energy will use its reasonable best efforts expeditiously and in good faith to
take all such actions and do all such things as are necessary or desirable to
enable and permit holders of Exchangeable Shares (other than Duke Energy and its
Affiliates) to participate in such Offer to the same extent and on an
economically equivalent basis as the holders of Duke Energy Common Shares,
without 



                                       -8-
                               Support Agreement

   132

discrimination. Without limiting the generality of the foregoing, Duke Energy
will use its reasonable best efforts expeditiously and in good faith to ensure
that holders of Exchangeable Shares may participate in each such Offer without
being required to retract Exchangeable Shares as against Exchangeco (or, if so
required, to ensure that any such retraction, shall be effective only upon, and
shall be conditional upon, the closing of such Offer and only to the extent
necessary to tender or deposit to the Offer). Nothing herein shall affect the
rights of Exchangeco to redeem (or Callco to purchase pursuant to the Redemption
Call Right) Exchangeable Shares, as applicable, in the event of a Duke Energy
Control Transaction.

2.9      OWNERSHIP OF OUTSTANDING SHARES

         Without the prior approval of Exchangeco and the prior approval of the
holders of the Exchangeable Shares given in accordance with Section 10.2 of the
Exchangeable Share Provisions, Duke Energy covenants and agrees in favour of
Exchangeco that, as long as any outstanding Exchangeable Shares are owned by any
Person other than Duke Energy or any of its Affiliates, Duke Energy will be and
remain the direct or indirect beneficial owner of all issued and outstanding
voting shares in the capital of Exchangeco and Callco. Notwithstanding the
foregoing, Duke Energy shall not be in violation of this section if any person
or group of persons acting jointly or in concert acquires all or substantially
all of the assets of Duke Energy or the Duke Energy Common Shares pursuant to
any merger of Duke Energy pursuant to which Duke Energy was not the surviving
corporation.

2.10     DUKE ENERGY AND AFFILIATES NOT TO VOTE EXCHANGEABLE SHARES

         Duke Energy covenants and agrees that it will appoint and cause to be
appointed proxyholders with respect to any Exchangeable Shares held by it and
its Affiliates for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. Duke Energy further covenants and agrees that it will not, and will
cause its Affiliates not to, exercise any voting rights which may be exercisable
by holders of Exchangeable Shares from time to time pursuant to the Exchangeable
Share Provisions or pursuant to the provisions of the CBCA (or any successor or
other corporate statute by which Exchangeco may in the future be governed) with
respect to any Exchangeable Shares held by it or by its Affiliates in respect of
any matter considered at any meeting of holders of Exchangeable Shares.

2.11     RULE L0B-18 PURCHASES

         For greater certainty, nothing contained in this Agreement, including
the obligations of Duke Energy contained in Section 2.8 hereof, shall limit the
ability of Duke Energy or Exchangeco to make a "Rule 10b-18 purchase" of Duke
Energy Common Shares pursuant to Rule 10b-18 of the United States Securities
Exchange Act of 1934, as amended, or any successor rule.

2.12     STOCK EXCHANGE LISTING

         Duke Energy covenants and agrees in favour of Exchangeco that, as long
as any outstanding Exchangeable Shares are owned by any Person other than Duke
Energy or any of its 


                                       -9-
                               Support Agreement

   133

Affiliates, Duke Energy will use its reasonable best efforts to maintain a
listing for such Exchangeable Shares on a Canadian stock exchange.

                                   ARTICLE 3
                             DUKE ENERGY SUCCESSORS

3.1      CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.

         Duke Energy shall not consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other Person or, in the case of a
merger, of the continuing corporation resulting therefrom unless, but may do so
if:

         (a)  such other Person or continuing corporation (the "DUKE ENERGY
              SUCCESSOR") by operation of law, becomes, without more, bound by
              the terms and provisions of this Agreement or, if not so bound,
              executes, prior to or contemporaneously with the consummation of
              such transaction, an agreement supplemental hereto and such other
              instruments (if any) as are reasonably necessary or advisable to
              evidence the assumption by the Duke Energy Successor of liability
              for all moneys payable and property deliverable hereunder and the
              covenant of such Duke Energy Successor to pay and deliver or cause
              to be delivered the same and its agreement to observe and perform
              all the covenants and obligations of Duke Energy under this
              Agreement; and

         (b)  such transaction shall be upon such terms and conditions as
              substantially to preserve and not to impair in any material
              respect any of the rights, duties, powers and authorities of the
              other parties hereunder or the holders of Exchangeable Shares. 

3.2      VESTING OF POWERS IN SUCCESSOR

         Whenever the conditions of Section 3.1 have been duly observed and
performed, the parties, if required by Section 3.1, shall execute and deliver
the supplemental agreement provided for in Section 3.1(a) and thereupon the Duke
Energy Successor shall possess and from time to time may exercise each and every
right and power of Duke Energy under this Agreement in the name of Duke Energy
or otherwise and any act or proceeding by any provision of this Agreement
required to be done or performed by the Board of Directors of Duke Energy or any
officers of Duke Energy may be done and performed with like force and effect by
the directors or officers of such Duke Energy Successor.

3.3      WHOLLY-OWNED SUBSIDIARIES

         Nothing herein shall be construed as preventing the amalgamation or
merger of any wholly-owned direct or indirect subsidiary of Duke Energy with or
into Duke Energy or the winding-up, liquidation or dissolution of any
wholly-owned subsidiary of Duke Energy provided that all of the assets of such
subsidiary are transferred to Duke Energy or another wholly-owned 


                                      -10-
                               Support Agreement

   134

direct or indirect subsidiary of Duke Energy and any such transactions are
expressly permitted by this Article 3.

                                    ARTICLE 4
                                     GENERAL

4.1      TERM

         This Agreement shall come into force and be effective as of the date
hereof and shall terminate and be of no further force and effect at such time as
no Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Exchangeable Shares) are held by any Person
other than Duke Energy and any of its Affiliates.

4.2      CHANGES IN CAPITAL OF DUKE ENERGY AND EXCHANGECO

         At all times after the occurrence of any event contemplated pursuant to
Sections 2.7 and 2.8 hereof or otherwise, as a result of which either Duke
Energy Common Shares or the Exchangeable Shares or both are in any way changed,
this Agreement shall forthwith be deemed amended and modified as necessary in
order that it shall apply with full force and effect, mutatis mutandis, to all
new securities into which Duke Energy Common Shares or the Exchangeable Shares
or both are so changed and the parties hereto shall execute and deliver an
agreement in writing giving effect to and evidencing such necessary amendments
and modifications.

4.3      NOTICES TO PARTIES

         All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed)
or dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party at:

         (a)  If to Duke Energy, at:

            -----------------------------------------------------------
            
            -----------------------------------------------------------

            -----------------------------------------------------------
            Attention:                                           
                      -------------------------------------------------
            Telecopier Number:  (_____) _____-______

         (b)  If to Exchangeco, at:

            ----------------------------------------------------------- 
            
            -----------------------------------------------------------

            -----------------------------------------------------------
            Attention:                                           
                      -------------------------------------------------
            Telecopier Number:  (_____) _____-______


or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing.


                                      -11-
                               Support Agreement

   135


4.4      ASSIGNMENT

         No party hereto may assign this Agreement or any of its rights,
interests or obligations under this Agreement or the Arrangement (whether by
operation of law or otherwise) except that Exchangeco may assign in its sole
discretion, any or all of its rights, interests and obligations hereunder to any
wholly-owned subsidiary of Duke Energy.

4.5      BINDING EFFECT

         Subject to Section 4.4, this Agreement and the Arrangement shall be
binding upon, enure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns.

4.6      AMENDMENTS, MODIFICATIONS

         This Agreement may not be amended or modified except by an agreement in
writing executed by Exchangeco, Callco and Duke Energy and approved by the
holders of the Exchangeable Shares in accordance with Section 10.2 of the
Exchangeable Share Provisions.

4.7      MINISTERIAL AMENDMENTS

         Notwithstanding the provisions of Section 4.6, the parties to this
Agreement may in writing at any time and from time to time, without the approval
of the holders of the Exchangeable Shares, amend or modify this Agreement for
the purposes of:

         (a)  adding to the covenants of any or all parties provided that the
              board of directors of each of Exchangeco, Callco and Duke Energy
              shall be of the good faith opinion that such additions will not be
              prejudicial to the rights or interests of the holders of the
              Exchangeable Shares;

         (b)  making such amendments or modifications not inconsistent with this
              Agreement as may be necessary or desirable with respect to matters
              or questions which, in the good faith opinion of the board of
              directors of each of Exchangeco, Callco and Duke Energy, it may be
              expedient to make, provided that each such board of directors
              shall be of the good faith opinion that such amendments or
              modifications will not be prejudicial to the rights or interests
              of the holders of the Exchangeable Shares; or

         (c)  making such changes or corrections which, on the advice of counsel
              to Exchangeco, Callco and Duke Energy, are required for the
              purpose of curing or correcting any ambiguity or defect or
              inconsistent provision or clerical omission or mistake or manifest
              error, provided that the board of directors of each of Exchangeco,
              Callco and Duke Energy shall be of the good faith opinion that
              such changes or corrections will not be prejudicial to the rights
              or interests of the holders of the Exchangeable Shares.

                                      -12-
                               Support Agreement

   136


4.8      MEETING TO CONSIDER AMENDMENTS

         Exchangeco, at the request of Duke Energy, shall call a meeting or
meetings of the holders of the Exchangeable Shares for the purpose of
considering any proposed amendment or modification requiring approval pursuant
to Section 4.6 hereof. Any such meeting or meetings shall be called and held in
accordance with the bylaws of Exchangeco, the Exchangeable Share Provisions and
all applicable laws.

4.9      AMENDMENTS ONLY IN WRITING

         No amendment to or modification or waiver of any of the provisions of
this Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto.

4.10     GOVERNING LAWS; CONSENT TO JURISDICTION

         This Agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein and shall be treated in all respects as a British Columbia contract.
Each party hereby irrevocably attorns to the jurisdiction of the courts of the
Province of British Columbia in respect of all matters arising under or in
relation to this Agreement.

4.11     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 materially 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
transactions contemplated hereby are fulfilled to the extent possible.

4.12     COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.


                                      -13-
                               Support Agreement

   137


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                       DUKE ENERGY CORPORATION


                                       By: _____________________________________
                                       Name: ___________________________________
                                       Title:   ________________________________


                                       3946509 CANADA INC.


                                       By: _____________________________________
                                       Name:    ________________________________
                                       Title:   ________________________________


                                       3058368 NOVA SCOTIA COMPANY


                                       By: _____________________________________
                                       Name: ___________________________________
                                       Title: __________________________________


                                      -14-
                               Support Agreement





   138

                                   SCHEDULE G

                   FORM OF VOTING AND EXCHANGE TRUST AGREEMENT


         VOTING AND EXCHANGE AGREEMENT ("AGREEMENT") made as of the ___ day of
_________, 200_.

BETWEEN:

            DUKE ENERGY CORPORATION,
            a corporation existing under the laws of the State of North Carolina
            (hereinafter referred to as "DUKE ENERGY"),

                                                              OF THE FIRST PART,

                                 - and -

            3946509 CANADA INC.,
            a corporation existing under the laws of Canada
            (hereinafter referred to as "EXCHANGECO"),

                                                             OF THE SECOND PART,

                                 - and -

            [                   ],
            a United States trust company incorporated under the laws of
            ________________ (hereinafter referred to as the "TRUSTEE"),

                                                              OF THE THIRD PART.

         WHEREAS, in connection with the Combination Agreement, Exchangeco may
be required to issue Exchangeable Shares to certain holders of common shares in
the capital of Westcoast pursuant to the Plan of Arrangement contemplated in the
Combination Agreement; and

         WHEREAS, pursuant to the Combination Agreement, Duke Energy and
Exchangeco have agreed to execute a voting and exchange trust agreement
substantially in the form of this Agreement;

         NOW, THEREFORE, in consideration of the respective covenants and
agreements provided in this Agreement and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto covenant and agree as follows:
   139

                                   ARTICLE 1
                                 INTERPRETATION

         1.1      DEFINITIONS

         In this Agreement, unless the context otherwise requires, the following
terms shall have the following meanings respectively:

         "AFFILIATE" has the meaning ascribed thereto in the Securities Act,
unless otherwise expressly stated herein;

         "ARRANGEMENT" means the arrangement under Section 192 of the CBCA on
the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with Article
6 of the Plan of Arrangement and Section 7.1 of the Combination Agreement or
made at the direction of the Court;

         "AUTOMATIC EXCHANGE RIGHTS" means the benefit of the obligation of Duke
Energy to effect the automatic exchange of Exchangeable Shares for Duke Energy
Common Shares pursuant to Section 5.12;

         "BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than Duke Energy and its Affiliates;

         "BENEFICIARY VOTES" has the meaning ascribed thereto in Section 4.2;

         "BUSINESS DAY" means any day on which commercial banks are generally
open for business in New York, New York and Vancouver, British Columbia, other
than a Saturday, a Sunday or a day observed as a holiday in New York, New York
under the laws of the State of New York or the federal laws of the United States
of America or in Vancouver, British Columbia under the laws of the Province of
British Columbia or the federal laws of Canada;

         "CALLCO" means 3058368 Nova Scotia Company, an unlimited liability
company existing under the laws of the Province of Nova Scotia;

         "CBCA" means the Canada Business Corporations Act as now in effect and
as it may be amended from time to time prior to the date hereof;

         "COMBINATION AGREEMENT" means the combination agreement made as of
September 20, 2001 among Duke Energy, Exchangeco, Callco and Westcoast, as
amended, supplemented and/or restated in accordance therewith prior to the date
hereof, providing for, among other things, the Arrangement;

         "COURT" has the meaning ascribed thereto in the Plan of Arrangement;

         "DUKE ENERGY COMMON SHARES" means the shares of common stock, no par
value per share, in the capital of Duke Energy;

                                      -2-
                      VOTING AND EXCHANGE TRUST AGREEMENT
   140

         "DUKE ENERGY CONSENT" has the meaning ascribed thereto in Section 4.2;

         "DUKE ENERGY MEETING" has the meaning ascribed thereto in Section 4.2;

         "DUKE ENERGY SUCCESSOR" has the meaning ascribed thereto in Section
10.1(a).

         "EQUIVALENT VOTE AMOUNT" means, with respect to any matter, proposition
or question on which holders of Duke Energy Common Shares are entitled to vote,
consent or otherwise act, the number of votes to which a holder of one Duke
Energy Common Share is entitled with respect to such matter, proposition or
question;

         "EXCHANGE RIGHT" has the meaning ascribed thereto in Section 5.1;

         "EXCHANGEABLE SHARES" means the non-voting exchangeable shares in the
capital of Exchangeco, having substantially the rights, privileges, restrictions
and conditions set out in Appendix 1 to the Plan of Arrangement;

         "EXCHANGEABLE SHARE CONSIDERATION" has the meaning ascribed thereto in
the Exchangeable Share Provisions;

         "EXCHANGEABLE SHARE PRICE" has the meaning ascribed thereto in the
Exchangeable Share Provisions;

         "EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares;

         "FINAL ORDER" means the final order of the Court approving the
Arrangement as such order may be amended by the Court at any time prior to the
date hereof or, if appealed, then, unless such appeal is withdrawn or denied, as
affirmed;

         "INDEMNIFIED PARTIES" has the meaning ascribed thereto in Section 8.1;

         "INSOLVENCY EVENT" means (i) the institution by Exchangeco of any
proceeding to be adjudicated a bankrupt or insolvent or to be wound up, or the
consent of Exchangeco to the institution of bankruptcy, insolvency or winding-up
proceedings against it, or (ii) the filing of a petition, answer or consent
seeking dissolution or winding-up under any bankruptcy, insolvency or analogous
laws, including the Companies Creditors' Arrangement Act (Canada) and the
Bankruptcy and Insolvency Act (Canada), and the failure by Exchangeco to contest
in good faith any such proceedings commenced in respect of Exchangeco within 30
days of becoming aware thereof, or the consent by Exchangeco to the filing of
any such petition or to the appointment of a receiver, or (iii) the making by
Exchangeco of a general assignment for the benefit of creditors, or the
admission in writing by Exchangeco of its inability to pay its debts generally
as they become due, or (iv) Exchangeco not being permitted, pursuant to solvency
requirements of applicable law, to redeem any Retracted Shares pursuant to
Section 6.6 of the Exchangeable Share Provisions;

         "LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Plan
of Arrangement;

                                       -3-
                       VOTING AND EXCHANGE TRUST AGREEMENT
   141

         "LIQUIDATION EVENT" has the meaning ascribed thereto in Section
5.12(b);

         "LIQUIDATION EVENT EFFECTIVE TIME" has the meaning ascribed thereto in
Section 5.12(c);

         "LIST" has the meaning ascribed thereto in Section 4.6;

         "NYSE" means The New York Stock Exchange, Inc.;

         "OFFICER'S CERTIFICATE" means, with respect to Duke Energy or
Exchangeco, as the case may be, a certificate signed by any one of the
authorized signatories of Duke Energy or Exchangeco, as the case may be;

         "PERSON" includes any individual, firm, partnership, joint venture,
venture capital fund, limited liability company, unlimited liability company,
association, trust, trustee, executor, administrator, legal personal
representative, estate, group, body corporate, corporation, unincorporated
association or organization, government body, syndicate or other entity, whether
or not having legal status;

         "PLAN OF ARRANGEMENT" means the plan of arrangement substantially in
the form and content of Schedule E annexed to the Combination Agreement and any
amendments or variations thereto made in accordance with Section 7.1 of the
Combination Agreement or Article 6 of the Plan of Arrangement or made at the
direction of the Court in the Final Order;

         "REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement;

         "RETRACTED SHARES" has the meaning ascribed thereto in Section 5.7;

         "RETRACTION CALL RIGHT" has the meaning ascribed thereto in the
Exchangeable Share Provisions;

         "SECURITIES ACT" means the Securities Act (Ontario) and the rules,
regulations and policies made thereunder, as now in effect and as they may be
amended from time to time prior to the Effective Date;

         "SUPPORT AGREEMENT" means that certain support agreement made as of
even date herewith between Exchangeco, Callco and Duke Energy substantially in
the form and content of Schedule F to the Combination Agreement, with such
changes thereto as the parties to the Combination Agreement, acting reasonably,
may agree;

         "TRUST" means the trust created by this Agreement;

         "TRUST ESTATE" means the Duke Energy Common Shares, any other
securities, the Exchange Right, the Automatic Exchange Rights and any money or
other property which may be held by the Trustee from time to time pursuant to
this Agreement;

                                       -4-
                       VOTING AND EXCHANGE TRUST AGREEMENT
   142

         "VOTING RIGHTS" means the voting rights of the Duke Energy Common
Shares held by the Trustee in respect of which the Beneficiaries are, in
accordance with this Agreement, entitled to instruct the Trustee to vote;

         "WESTCOAST" means Westcoast Energy Inc., a corporation existing under
the laws of Canada;

         1.2      INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.

         The division of this Agreement into articles, sections and other
portions and the insertion of headings are for convenience of reference only and
should not affect the construction or interpretation hereof. Unless otherwise
indicated, all references to an "Article" or "Section" followed by a number
refer to the specified Article or Section of this Agreement. The terms "this
Agreement," "hereof," "herein" and "hereunder" and similar expressions refer to
this Agreement and not to any particular Article, Section or other portion
hereof.

         1.3      RULES OF CONSTRUCTION

         Unless otherwise specifically indicated or the context otherwise
requires, (a) all references to "dollars" or "$" mean United States dollars, (b)
words importing the singular shall include the plural and vice versa and words
importing any gender shall include all genders, and (c) "include," "includes"
and "including" shall be deemed to be followed by the words "without
limitation."

         1.4      DATE FOR ANY ACTION

         In the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such action shall
be required to be taken on the next succeeding day that is a Business Day.

         1.5      PAYMENTS

         All payments to be made hereunder will be made without interest and
less any tax required by Canadian law to be deducted or withheld.

                                   ARTICLE 2
                              PURPOSE OF AGREEMENT

         2.1      ESTABLISHMENT OF TRUST

         The purpose of this Agreement is to create the Trust for the benefit of
the Beneficiaries and Duke Energy, as herein provided. The Trustee will hold
Duke Energy Common Shares in order to enable the Trustee to exercise the Voting
Rights and will hold the Exchange Right and the Automatic Exchange Rights in
order to enable the Trustee to exercise such rights, in each case as trustee for
and on behalf of the Beneficiaries as provided in this Agreement. The Trustee
will hold the Duke Energy Common Shares for and on behalf of Duke Energy for all
other rights associated with such Duke Energy Common Shares other than the
Voting Rights.

                                       -5-
                       VOTING AND EXCHANGE TRUST AGREEMENT
   143

                                   ARTICLE 3
                            DUKE ENERGY COMMON SHARES

         3.1      ISSUE AND OWNERSHIP OF THE DUKE ENERGY COMMON SHARES

         Duke Energy hereby agrees to issue to, and deposit with, the Trustee
from time to time such number of Duke Energy Common Shares so that upon such
deposit the Trustee shall hold a number of Duke Energy Common Shares which is
equal to the number of Exchangeable Shares issued and outstanding as of such
time (other than Exchangeable Shares held by Duke Energy or any Affiliate
thereof). Such Duke Energy Common Shares issued pursuant to this Section 3.1
shall be hereafter held of record by the Trustee as trustee for and on behalf
of, and for the use and benefit of, the Beneficiaries and Duke Energy and in
accordance with the provisions of this Agreement. During the term of the Trust
and subject to the terms and conditions of this Agreement, the Trustee shall
possess and be vested with full legal ownership of such Duke Energy Common
Shares and shall be entitled to exercise all of the rights and powers of an
owner with respect to such Duke Energy Common Shares provided that the Trustee
shall:

         (a)      hold such Duke Energy Common Shares and the legal title
                  thereto as trustee solely for the use and benefit of the
                  Beneficiaries and Duke Energy in accordance with the
                  provisions of this Agreement; and

         (b)      except as specifically authorized by this Agreement, have no
                  power or authority to sell, transfer, vote or otherwise deal
                  in or with such Duke Energy Common Shares and such Duke Energy
                  Common Shares shall not be used or disposed of by the Trustee
                  for any purpose other than the purposes for which this Trust
                  is created pursuant to this Agreement.

         3.2      TRANSFER OF DUKE ENERGY COMMON SHARES AND DIVIDENDS TO DUKE
                  ENERGY

         In connection with the exchange by a holder or redemption or retraction
of Exchangeable Shares from time to time for Duke Energy Common Shares, the
Trustee shall concurrently therewith distribute to Duke Energy such Duke Energy
Common Shares from the Trust Estate equal to the number of Exchangeable Shares
exchanged by such holder for Duke Energy Common Shares. Upon receipt of any
dividend or other distribution on the Duke Energy Common Shares (except to the
extent such dividend or distribution is paid in Duke Energy Common Shares), the
Trustee shall immediately transfer such dividend or distribution to Duke Energy;
provided, however, that the Trustee may not transfer any dividend or
distribution on the Duke Energy Common Shares held by the Trustee to Duke Energy
pursuant to the preceding clause until such time as an Equivalent Dividend (as
defined in the Support Agreement) is declared and paid on the Exchangeable
Shares.

         3.3      LEGENDED SHARE CERTIFICATES

         Exchangeco will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Beneficiaries of their right to
instruct the Trustee with respect to the exercise of the portion of the Voting
Rights in respect of the Exchangeable Shares held by the Beneficiaries.

                                       -6-
                       VOTING AND EXCHANGE TRUST AGREEMENT
   144

         3.4      SAFE KEEPING OF CERTIFICATE

         If physical certificates representing the Duke Energy Common Shares are
held by the Trust, such certificates shall at all times be held in safe keeping
by the Trustee or its agent.

                                   ARTICLE 4
                            EXERCISE OF VOTING RIGHTS

         4.1      VOTING RIGHTS

         The Trustee, as the holder of record of Duke Energy Common Shares
forming part of the Trust Estate, shall be entitled to all of the Voting Rights,
including the right to vote in person or by proxy the Duke Energy Common Shares
held by the Trustee on any matter, question, proposal or proposition whatsoever
that may properly come before the shareholders of Duke Energy at a Duke Energy
Meeting or in connection with a Duke Energy Consent. The Voting Rights shall be
and remain vested in and exercised by the Trustee. Subject to Section 6.15
hereof:

         (a)      the Trustee shall exercise the Voting Rights only on the basis
                  of instructions received pursuant to this Article 4 from
                  Beneficiaries entitled to instruct the Trustee as to the
                  voting thereof at the time at which the Duke Energy Meeting is
                  held or a Duke Energy Consent is sought; and

         (b)      to the extent that no instructions are received from a
                  Beneficiary with respect to the Voting Rights to which such
                  Beneficiary is entitled, the Trustee shall not exercise or
                  permit the exercise of such Voting Rights.

         4.2      NUMBER OF VOTES

         With respect to all meetings of shareholders of Duke Energy at which
holders of Duke Energy Common Shares are entitled to vote (each, a "DUKE ENERGY
MEETING") and with respect to all written consents sought from Duke Energy's
shareholders, including the holders of Duke Energy Common Shares (each, a "DUKE
ENERGY CONSENT"), each Beneficiary shall be entitled to instruct the Trustee to
cast and exercise, in the manner instructed, a number of votes equal to the
Equivalent Vote Amount for each Exchangeable Share owned of record by such
Beneficiary on the record date established by Duke Energy or by applicable law
for such Duke Energy Meeting or Duke Energy Consent, as the case may be
(collectively, the "BENEFICIARY VOTES"), in respect of each matter, question,
proposal or proposition to be voted on at such Duke Energy Meeting or consented
to in connection with such Duke Energy Consent.

         4.3      MAILINGS TO SHAREHOLDERS

         With respect to each Duke Energy Meeting and Duke Energy Consent, the
Trustee will use its reasonable efforts promptly to mail or cause to be mailed
(or otherwise communicate in the same manner as Duke Energy utilizes in
communications to holders of Duke Energy Common Shares subject to applicable
regulatory requirements and provided such manner of communications is reasonably
available to the Trustee) to each of the Beneficiaries named in the

                                       -7-
                       VOTING AND EXCHANGE TRUST AGREEMENT
   145

List, such mailing or communication to commence on the same day as the mailing
or notice (or other communication) with respect thereto is commenced by Duke
Energy to its shareholders:

         (a)      a copy of such notice, together with any related materials,
                  including any proxy or information statement, to be provided
                  to shareholders of Duke Energy;

         (b)      a statement that such Beneficiary is entitled to instruct the
                  Trustee as to the exercise of the Beneficiary Votes with
                  respect to such Duke Energy Meeting or Duke Energy Consent or,
                  pursuant to Section 4.7, to attend such Duke Energy Meeting
                  and to exercise personally thereat the Beneficiary Votes of
                  such Beneficiary;

         (c)      a statement as to the manner in which such instructions may be
                  given to the Trustee, including an express indication that
                  instructions may be given to the Trustee to give:

                  (i)      a proxy to such Beneficiary or its designee to
                           exercise personally the Beneficiary Votes; or

                  (ii)     a proxy to a designated agent or other representative
                           of the management of Duke Energy to exercise such
                           Beneficiary Votes;

         (d)      a statement that if no such instructions are received from the
                  Beneficiary, the Beneficiary Votes to which such Beneficiary
                  is entitled will not be exercised;

         (e)      a form of direction whereby the Beneficiary may so direct and
                  instruct the Trustee as contemplated herein; and

         (f)      a statement of the time and date by which such instructions
                  must be received by the Trustee in order to be binding upon
                  it, which in the case of a Duke Energy Meeting shall not be
                  earlier than the close of business on the second Business Day
                  prior to such meeting, and of the method for revoking or
                  amending such instructions.

         For the purpose of determining Beneficiary Votes to which a Beneficiary
is entitled in respect of any Duke Energy Meeting or Duke Energy Consent, the
number of Exchangeable Shares owned of record by the Beneficiary shall be
determined at the close of business on the record date established by Duke
Energy or by applicable law for purposes of determining shareholders entitled to
vote at such Duke Energy Meeting or to give written consent in connection with
such Duke Energy Consent. Duke Energy will notify the Trustee of any decision of
the Board of Directors of Duke Energy with respect to the calling of any Duke
Energy Meeting or the seeking of any Duke Energy Consent and shall provide all
necessary information and materials to the Trustee in each case promptly and in
any event in sufficient time to enable the Trustee to perform its obligations
contemplated by this Section 4.3.

         The materials referred to in this Section 4.3 are to be provided to the
Trustee by Duke Energy and the materials referred to in Section 4.3(c), (e) and
(f) shall be subject to reasonable

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                       VOTING AND EXCHANGE TRUST AGREEMENT
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comment by the Trustee in a timely manner. Duke Energy shall ensure that the
materials to be provided to the Trustee are provided in sufficient time to
permit the Trustee to comment as aforesaid and to send all materials to each
Beneficiary at the same time as such materials are first sent to holders of Duke
Energy Common Shares. Duke Energy agrees not to communicate with holders of Duke
Energy Common Shares with respect to the materials referred to in this Section
4.3 otherwise than by mail unless such method of communication is also
reasonably available to the Trustee for communication with the Beneficiaries.
Notwithstanding the foregoing, Duke Energy may at its option exercise the duties
of the Trustee to deliver copies of all materials to each Beneficiary as
required by this Section 4.3 so long as in each case Duke Energy delivers a
certificate to the Trustee stating that Duke Energy has undertaken to perform
the obligations set forth in this Section 4.3.

         4.4      COPIES OF SHAREHOLDER INFORMATION

         Duke Energy will deliver to the Trustee copies of all proxy materials
(including notices of Duke Energy Meetings but excluding proxies to vote Duke
Energy Common Shares), information statements, reports (including all interim
and annual financial statements) and other written communications that, in each
case, are to be distributed from time to time to holders of Duke Energy Common
Shares in sufficient quantities and in sufficient time so as to enable the
Trustee to send those materials to each Beneficiary, to the extent possible, at
the same time as such materials are first sent to holders of Duke Energy Common
Shares. The Trustee will mail or otherwise send to each Beneficiary, at the
expense of Duke Energy, copies of all such materials (and all materials
specifically directed to the Beneficiaries or to the Trustee for the benefit of
the Beneficiaries by Duke Energy) received by the Trustee from Duke Energy, to
the extent possible, at the same time as such materials are sent to holders of
Duke Energy Common Shares. The Trustee will make copies of all such materials
available for inspection by any Beneficiary at the Trustee's principal office in
___________. Notwithstanding the foregoing, Duke Energy at its option may
exercise the duties of the Trustee to deliver copies of all materials to each
Beneficiary as required by this Section 4.4 so long as in each case Duke Energy
delivers a certificate to the Trustee stating that Duke Energy has undertaken to
perform the obligations set forth in this Section 4.4.

         4.5      OTHER MATERIALS

         As soon as reasonably practicable after receipt by Duke Energy or
holders of Duke Energy Common Shares (if such receipt is known by Duke Energy)
of any material sent or given by or on behalf of a third party to holders of
Duke Energy Common Shares generally, including dissident proxy and information
circulars (and related information and material) and tender and exchange offer
circulars (and related information and material), Duke Energy shall use its
reasonable best efforts to obtain and deliver to the Trustee copies thereof in
sufficient quantities so as to enable the Trustee to forward such material
(unless the same has been provided directly to Beneficiaries by such third
party) to each Beneficiary as soon as possible thereafter. As soon as reasonably
practicable after receipt thereof, the Trustee will mail or otherwise send to
each Beneficiary, at the expense of Duke Energy, copies of all such materials
received by the Trustee from Duke Energy. The Trustee will also make available
for inspection by any Beneficiary at the Trustee's principal office in
___________ copies of all such materials. Notwithstanding the

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foregoing, Duke Energy at its option may exercise the duties of the Trustee to
deliver copies of all such materials to each Beneficiary as required by this
Section 4.5 so long as in each case Duke Energy delivers a certificate to the
Trustee stating that Duke Energy has undertaken to perform the obligations set
forth in this Section 4.5.

         4.6      LIST OF PERSONS ENTITLED TO VOTE

         Exchangeco shall, (a) prior to each annual and special Duke Energy
Meeting or the seeking of any Duke Energy Consent and (b) forthwith upon each
request made at any time by the Trustee in writing, prepare or cause to be
prepared a list (a "LIST") of the names and addresses of the Beneficiaries
arranged in alphabetical order and showing the number of Exchangeable Shares
held of record by each such Beneficiary, in each case at the close of business
on the date specified by the Trustee in such request or, in the case of a List
prepared in connection with a Duke Energy Meeting or a Duke Energy Consent, at
the close of business on the record date established by Duke Energy or pursuant
to applicable law for determining the holders of Duke Energy Common Shares
entitled to receive notice of and/or to vote at such Duke Energy Meeting or to
give consent in connection with such Duke Energy Consent. Each such List shall
be delivered to the Trustee promptly after receipt by Exchangeco of such request
or the record date for such meeting or seeking of consent, as the case may be,
and in any event within sufficient time as to permit the Trustee to perform its
obligations under this Agreement. Duke Energy agrees to give Exchangeco notice
(with a copy to the Trustee) of the calling of any Duke Energy Meeting or the
seeking of any Duke Energy Consent by Duke Energy or its management, together
with the record dates therefor, sufficiently prior to the date of the calling of
such meeting or seeking of such consent so as to enable Exchangeco to perform
its obligations under this Section 4.6.

         4.7      ENTITLEMENT TO DIRECT VOTES

         Any Beneficiary named in a List prepared in connection with any Duke
Energy Meeting or Duke Energy Consent will be entitled (a) to instruct the
Trustee in the manner described in Section 4.3 with respect to the exercise of
the Beneficiary Votes to which such Beneficiary is entitled or (b) to attend
such meeting and personally exercise thereat (or to personally exercise with
respect to any Duke Energy Consent), as the proxy of the Trustee, the
Beneficiary Votes to which such Beneficiary is entitled.

         4.8      VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT
                  MEETING

         (a)      In connection with each Duke Energy Meeting and Duke Energy
                  Consent, the Trustee shall exercise, either in person or by
                  proxy, in accordance with the instructions received from a
                  Beneficiary pursuant to Section 4.3, the Beneficiary Votes as
                  to which such Beneficiary is entitled to direct the vote (or
                  any lesser number thereof as may be set forth in the
                  instructions); provided, however, that such written
                  instructions are received by the Trustee from the Beneficiary
                  prior to the time and date fixed by the Trustee for receipt of
                  such instruction in the notice given by the Trustee to the
                  Beneficiary pursuant to Section 4.3.

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         (b)      The Trustee shall cause a representative who is empowered by
                  it to sign and deliver, on behalf of the Trustee, proxies for
                  Voting Rights to attend each Duke Energy Meeting. Upon
                  submission by a Beneficiary (or its designee) of
                  identification satisfactory to the Trustee's representative,
                  and at the Beneficiary's request, such representative shall
                  sign and deliver to such Beneficiary (or its designee) a proxy
                  to exercise personally the Beneficiary Votes as to which such
                  Beneficiary is otherwise entitled hereunder to direct the
                  vote, if such Beneficiary either (i) has not previously given
                  the Trustee instructions pursuant to Section 4.3 in respect of
                  such meeting or (ii) submits to such representative written
                  revocation of any such previous instructions. At such meeting,
                  upon receipt of a proxy from the Trustee's representative, the
                  Beneficiary exercising such Beneficiary Votes shall have the
                  same rights as the Trustee to speak at the meeting in respect
                  of any matter, question, proposal or proposition, to vote by
                  way of ballot at the meeting in respect of any matter,
                  question, proposal or proposition, and to vote at such meeting
                  by way of a show of hands in respect of any matter, question
                  or proposition.

         4.9      DISTRIBUTION OF WRITTEN MATERIALS

         Any written materials distributed by or on behalf of the Trustee
pursuant to this Agreement shall be sent by mail (or otherwise communicated in
the same manner as Duke Energy utilizes in communications to holders of Duke
Energy Common Shares, subject to applicable regulatory requirements and provided
such manner of communications is reasonably available to the Trustee) to each
Beneficiary at its address as shown on the books of Exchangeco. Duke Energy
agrees not to communicate with holders of Duke Energy Common Shares with respect
to such written material otherwise than by mail unless such method of
communication is also reasonably available to the Trustee for communication with
the Beneficiaries. Exchangeco shall provide or cause to be provided to the
Trustee for purposes of communication, on a timely basis and without charge or
other expense:

         (a)      a current List; and

         (b)      upon the request of the Trustee, mailing labels to enable the
                  Trustee to carry out its duties under this Agreement.

Exchangeco's obligations under this Section 4.9 shall be deemed satisfied to the
extent Duke Energy exercises its option to perform the duties of the Trustee to
deliver copies of materials to each Beneficiary and Exchangeco provides the
required information and materials to Duke Energy.

         4.10     TERMINATION OF VOTING RIGHTS

         Except as otherwise provided herein or in the Exchangeable Share
Provisions, all of the rights of a Beneficiary with respect to the Beneficiary
Votes exercisable in respect of the Exchangeable Shares held by such
Beneficiary, including the right to instruct the Trustee as to the voting of or
to vote personally such Beneficiary Votes, shall be deemed to be surrendered by

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the Beneficiary to Duke Energy or Callco, as the case may be, and such
Beneficiary Votes and the Voting Rights represented thereby shall cease and be
terminated immediately, upon the delivery by such Beneficiary to the Trustee of
the certificates representing such Exchangeable Shares in connection with the
exercise by the Beneficiary of the Exchange Right or upon the occurrence of the
automatic exchange of Exchangeable Shares for Duke Energy Common Shares, as
specified in Article 5 (unless, in either case, Duke Energy shall not have
delivered the Exchangeable Share Consideration deliverable in exchange therefor
to the Trustee for delivery to the Beneficiaries), or upon the redemption of
Exchangeable Shares pursuant to Article 6 or Article 7 of the Exchangeable Share
Provisions, or upon the effective date of the liquidation, dissolution or
winding-up of Exchangeco pursuant to Article 5 of the Exchangeable Share
Provisions, or upon the purchase of Exchangeable Shares from the holder thereof
by Callco pursuant to the exercise by Callco of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right.

                                   ARTICLE 5
                      EXCHANGE RIGHT AND AUTOMATIC EXCHANGE

         5.1      GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT

         Duke Energy hereby grants to the Trustee as trustee for and on behalf
of, and for the use and benefit of, the Beneficiaries the right (the "EXCHANGE
RIGHT"), upon the occurrence and during the continuance of an Insolvency Event,
to require Duke Energy to purchase from each or any Beneficiary all or any part
of the Exchangeable Shares held by such Beneficiary and the Automatic Exchange
Rights, all in accordance with the provisions of this Agreement. Duke Energy
hereby acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof) for
the grant of the Exchange Right and the Automatic Exchange Rights by Duke Energy
to the Trustee. During the term of the Trust and subject to the terms and
conditions of this Agreement, the Trustee shall possess and be vested with full
legal ownership of the Exchange Right and the Automatic Exchange Rights and
shall be entitled to exercise all of the rights and powers of an owner with
respect to the Exchange Right and the Automatic Exchange Rights, provided that
the Trustee shall:

         (a)      hold the Exchange Right and the Automatic Exchange Rights and
                  the legal title thereto as trustee solely for the use and
                  benefit of the Beneficiaries in accordance with the provisions
                  of this Agreement; and

         (b)      except as specifically authorized by this Agreement, have no
                  power or authority to exercise or otherwise deal in or with
                  the Exchange Right or the Automatic Exchange Rights, and the
                  Trustee shall not exercise any such rights for any purpose
                  other than the purposes for which the Trust is created
                  pursuant to this Agreement.

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         5.2      LEGENDED SHARE CERTIFICATES

         Exchangeco will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Beneficiaries of:

         (a)      their right to instruct the Trustee with respect to the
                  exercise of the Exchange Right in respect of the Exchangeable
                  Shares held by a Beneficiary; and

         (b)      the Automatic Exchange Rights.

         5.3      GENERAL EXERCISE OF EXCHANGE RIGHT

         The Exchange Right shall be and remain vested in and exercisable by the
Trustee. Subject to Section 6.15, the Trustee shall exercise the Exchange Right
only on the basis of instructions received pursuant to this Article 5 from
Beneficiaries entitled to instruct the Trustee as to the exercise thereof. To
the extent that no instructions are received from a Beneficiary with respect to
the Exchange Right, the Trustee shall not exercise or permit the exercise of the
Exchange Right.

         5.4      PURCHASE PRICE

         The purchase price payable by Duke Energy for each Exchangeable Share
to be purchased by Duke Energy under the Exchange Right shall be an amount per
share equal to the Exchangeable Share Price on the last Business Day prior to
the day of closing of the purchase and sale of such Exchangeable Share under the
Exchange Right. In connection with each exercise of the Exchange Right, Duke
Energy shall provide to the Trustee an Officer's Certificate setting forth the
calculation of the Exchangeable Share Price for each Exchangeable Share. The
Exchangeable Share Price for each such Exchangeable Share so purchased may be
satisfied only by Duke Energy delivering or causing to be delivered to the
Trustee, on behalf of the relevant Beneficiary, the Exchangeable Share
Consideration representing the total Exchangeable Share Price. Upon payment by
Duke Energy of such purchase price to the Trustee for the benefit of the
Beneficiary, the relevant Beneficiary shall cease to have any right to be paid
any amount in respect of declared and unpaid dividends on each such Exchangeable
Share by Exchangeco.

         5.5      EXERCISE INSTRUCTIONS

         Subject to the terms and conditions herein set forth, a Beneficiary
shall be entitled, upon the occurrence and during the continuance of an
Insolvency Event, to instruct the Trustee to exercise the Exchange Right with
respect to all or any part of the Exchangeable Shares registered in the name of
such Beneficiary on the books of Exchangeco. To cause the exercise of the
Exchange Right by the Trustee, the Beneficiary shall deliver to the Trustee, in
person or by certified or registered mail, at its principal office in _________
or at such other places in Canada as the Trustee may from time to time designate
by written notice to the Beneficiaries, the certificates representing the
Exchangeable Shares which such Beneficiary desires Duke Energy to purchase, duly
endorsed in blank for transfer, and accompanied by such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the CBCA and

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                       VOTING AND EXCHANGE TRUST AGREEMENT
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the by-laws of Exchangeco and such additional documents and instruments as the
Trustee, Exchangeco and Duke Energy may reasonably require together with (a) a
duly completed form of notice of exercise of the Exchange Right, contained on
the reverse of or attached to the Exchangeable Share certificates, stating (i)
that the Beneficiary thereby instructs the Trustee to exercise the Exchange
Right so as to require Duke Energy to purchase from the Beneficiary the number
of Exchangeable Shares specified therein, (ii) that such Beneficiary has good
title to and owns all such Exchangeable Shares to be acquired by Duke Energy
free and clear of all liens, claims, security interests and encumbrances, (iii)
the names in which the certificates representing Duke Energy Common Shares
issuable in connection with the exercise of the Exchange Right are to be issued
and (iv) the names and addresses of the persons to whom such new certificates
should be delivered, and (b) payment (or evidence satisfactory to the Trustee,
Exchangeco and Duke Energy of payment) of the taxes (if any) payable as
contemplated by Section 5.8 of this Agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates delivered to
the Trustee are to be purchased by Duke Energy under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of Exchangeco.

         5.6      DELIVERY OF DUKE ENERGY COMMON SHARES; EFFECT OF EXERCISE

         Promptly after the receipt by the Trustee of the certificates
representing the Exchangeable Shares which the Beneficiary desires Duke Energy
to purchase under the Exchange Right, together with such documents and
instruments of transfer and a duly completed form of notice of exercise of the
Exchange Right (and payment of taxes, if any payable as contemplated by Section
5.8 or evidence thereof), duly endorsed for transfer to Duke Energy, the Trustee
shall notify Duke Energy and Exchangeco of its receipt of the same, which notice
to Duke Energy and Exchangeco shall constitute exercise of the Exchange Right by
the Trustee on behalf of the Beneficiary in respect of such Exchangeable Shares,
and Duke Energy shall promptly thereafter deliver or cause to be delivered to
the Trustee, for delivery to the Beneficiary in respect of such Exchangeable
Shares (or to such other persons, if any, properly designated by such
Beneficiary) the Exchangeable Share Consideration deliverable in connection with
the exercise of the Exchange Right; provided, however, that no such delivery
shall be made unless and until the Beneficiary requesting the same shall have
paid (or provided evidence satisfactory to the Trustee, Exchangeco and Duke
Energy of the payment of) the taxes (if any) payable as contemplated by Section
5.8 of this Agreement. Immediately upon the giving of notice by the Trustee to
Duke Energy and Exchangeco of the exercise of the Exchange Right, as provided in
this Section 5.6, the closing of the transaction of purchase and sale
contemplated by the Exchange Right shall be deemed to have occurred, and the
Beneficiary of such Exchangeable Shares shall be deemed to have transferred to
Duke Energy all of such Beneficiary's right, title and interest in and to such
Exchangeable Shares and in the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and shall not be entitled to
exercise any of the rights of a holder in respect thereof, other than the right
to receive his proportionate part of the total purchase price therefor, unless
such Exchangeable Share Consideration is not delivered by Duke Energy to the
Trustee for delivery to such Beneficiary (or to such other person, if any,
properly designated by such Beneficiary) within five Business Days of the date
of the giving of such notice by the Trustee, in which case the rights of the
Beneficiary shall remain unaffected until such Exchangeable Share Consideration
is delivered by Duke Energy and any cheque included therein

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is paid. Upon delivery of such Exchangeable Share Consideration by Duke Energy
to the Trustee, the Trustee shall deliver such Exchangeable Share Consideration
to such Beneficiary (or to such other person, if any, properly designated by
such Beneficiary). Concurrently with such Beneficiary ceasing to be a holder of
Exchangeable Shares, the Beneficiary shall be considered and deemed for all
purposes to be the holder of the Duke Energy Common Shares delivered to it
pursuant to the Exchange Right.

         5.7      EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION

         In the event that a Beneficiary has exercised its right under Article 6
of the Exchangeable Share Provisions to require Exchangeco to redeem any or all
of the Exchangeable Shares held by the Beneficiary (the "RETRACTED SHARES") and
is notified by Exchangeco pursuant to Section 6.6 of the Exchangeable Share
Provisions that Exchangeco will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, and provided
that Callco shall not have exercised the Retraction Call Right with respect to
the Retracted Shares and that the Beneficiary has not revoked the retraction
request delivered by the Beneficiary to Exchangeco pursuant to Section 6.7 of
the Exchangeable Share Provisions, and provided further that the Trustee has
received written notice of same from Exchangeco or Duke Energy, the retraction
request will constitute and will be deemed to constitute notice from the
Beneficiary to the Trustee instructing the Trustee to exercise the Exchange
Right with respect to those Retracted Shares that Exchangeco is unable to
redeem. In any such event, Exchangeco hereby agrees with the Trustee and in
favour of the Beneficiary promptly to forward or cause to be forwarded to the
Trustee all relevant materials delivered by the Beneficiary to Exchangeco or to
the transfer agent of the Exchangeable Shares (including a copy of the
retraction request delivered pursuant to Section 6.1 of the Exchangeable Share
Provisions) in connection with such proposed redemption of the Retracted Shares
and the Trustee will thereupon exercise the Exchange Right with respect to the
Retracted Shares that Exchangeco is not permitted to redeem and will require
Duke Energy to purchase such shares in accordance with the provisions of this
Article 5.

         5.8      STAMP OR OTHER TRANSFER TAXES

         Upon any sale of Exchangeable Shares to Duke Energy pursuant to the
Exchange Right or the Automatic Exchange Rights, the share certificate or
certificates representing Duke Energy Common Shares to be delivered in
connection with the payment of the purchase price therefor shall be issued in
the name of the Beneficiary in respect of the Exchangeable Shares so sold or in
such names as such Beneficiary may otherwise direct in writing without charge to
the holder of the Exchangeable Shares so sold; provided, however, that such
Beneficiary (a) shall pay (and none of Duke Energy, Exchangeco or the Trustee
shall be required to pay) any documentary, stamp, transfer or other taxes that
may be payable in respect of any transfer involved in the issuance or delivery
of such shares to a person other than such Beneficiary or (b) shall have
evidenced to the satisfaction of the Trustee, Duke Energy and Exchangeco that
such taxes, if any, have been paid.

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         5.9      NOTICE OF INSOLVENCY EVENT

         As soon as practicable following the occurrence of an Insolvency Event
or any event that with the giving of notice or the passage of time or both would
be an Insolvency Event, Exchangeco and Duke Energy shall give written notice
thereof to the Trustee. As soon as practicable following the receipt of notice
from Exchangeco and Duke Energy of the occurrence of an Insolvency Event, or
upon the Trustee becoming aware of an Insolvency Event, the Trustee will mail to
each Beneficiary, at the expense of Duke Energy (such funds to be received in
advance), a notice of such Insolvency Event in the form provided by Duke Energy,
which notice shall contain a brief statement of the rights of the Beneficiaries
with respect to the Exchange Right.

         5.10     QUALIFICATION OF DUKE ENERGY COMMON SHARES

         Duke Energy covenants that if any Duke Energy Common Shares to be
issued and delivered pursuant to the Exchange Right or the Automatic Exchange
Rights require registration or qualification with or approval of or the filing
of any document, including any prospectus or similar document, or the taking of
any proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or United States
federal, provincial, territorial or state law or regulation or pursuant to the
rules and regulations of any regulatory authority or the fulfillment of any
other Canadian or United States federal, provincial, territorial or state legal
requirement before such shares may be issued and delivered by Duke Energy to the
initial holder thereof or in order that such shares may be freely traded
thereafter (other than any restrictions of general application on transfer by
reason of a holder being a "control person" of Duke Energy for purposes of
Canadian provincial securities law or an "affiliate" of Duke Energy for purposes
of United States federal or state securities law), Duke Energy will in good
faith take all such actions and do all such things as are necessary or desirable
to cause such Duke Energy Common Shares to be and remain duly registered,
qualified or approved under United States and/or Canadian law, as the case may
be, to the extent expressly provided in the Combination Agreement. Duke Energy
will use its reasonable best efforts and in good faith expeditiously take all
such actions and do all such things as are reasonably necessary or desirable to
cause all Duke Energy Common Shares to be delivered pursuant to the Exchange
Right or the Automatic Exchange Rights to be listed, quoted or posted for
trading on all stock exchanges and quotation systems on which outstanding Duke
Energy Common Shares are listed, quoted or posted for trading at such time.

         5.11     DUKE ENERGY COMMON SHARES

         Duke Energy hereby represents, warrants and covenants that the Duke
Energy Common Shares issuable to Beneficiaries as described herein will be duly
authorized and validly issued, fully paid and non-assessable and shall be free
and clear of any lien, claim or encumbrance.

         5.12     AUTOMATIC EXCHANGE ON LIQUIDATION OF DUKE ENERGY

         (a)      Duke Energy will give the Trustee written notice of each of
                  the following events at the time set forth below:

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   154

                  (i)      in the event of any determination by the Board of
                           Directors of Duke Energy to institute voluntary
                           liquidation, dissolution or winding-up proceedings
                           with respect to Duke Energy or to effect any other
                           distribution of assets of Duke Energy among its
                           shareholders for the purpose of winding up its
                           affairs, at least 60 days prior to the proposed
                           effective date of such liquidation, dissolution,
                           winding-up or other distribution; and

                  (ii)     promptly following the earlier of (A) receipt by Duke
                           Energy of notice of, and (B) Duke Energy otherwise
                           becoming aware of, any threatened or instituted
                           claim, suit, petition or other proceedings with
                           respect to the involuntary liquidation, dissolution
                           or winding-up of Duke Energy or to effect any other
                           distribution of assets of Duke Energy among its
                           shareholders for the purpose of winding up its
                           affairs, in each case where Duke Energy has failed to
                           contest in good faith any such proceeding commenced
                           in respect of Duke Energy within 30 days of becoming
                           aware thereof.

         (b)      Promptly following receipt by the Trustee from Duke Energy of
                  notice of any event (a "LIQUIDATION Event") contemplated by
                  Section 5.12(a) above, the Trustee will give notice thereof to
                  the Beneficiaries. Such notice shall be provided to the
                  Trustee by Duke Energy and shall include a brief description
                  of rights of the Beneficiaries with respect to the Automatic
                  Exchange Rights provided for in Section 5.12(c).

         (c)      In order that the Beneficiaries will be able to participate on
                  a pro rata basis with the holders of Duke Energy Common Shares
                  in the distribution of assets of Duke Energy in connection
                  with a Liquidation Event, immediately prior to the effective
                  time (the "LIQUIDATION EVENT EFFECTIVE TIME") of a Liquidation
                  Event all of the then outstanding Exchangeable Shares shall be
                  automatically exchanged for Duke Energy Common Shares. To
                  effect such automatic exchange, Duke Energy shall purchase
                  each Exchangeable Share outstanding immediately prior to the
                  Liquidation Event Effective Time and held by Beneficiaries,
                  and each Beneficiary shall sell the Exchangeable Shares held
                  by such Beneficiary at such time, for a purchase price per
                  share equal to the Exchangeable Share Price applicable at that
                  time. Duke Energy shall provide the Trustee with an Officer's
                  Certificate in connection with any automatic exchange setting
                  forth the calculation of the Exchangeable Share Price for each
                  Exchangeable Share.

         (d)      The closing of the transaction of purchase and sale
                  contemplated by the automatic exchange of Exchangeable Shares
                  for Duke Energy Common Shares shall be deemed to have occurred
                  immediately prior to the Liquidation Event Effective Time, and
                  each Beneficiary shall be deemed to have transferred to Duke
                  Energy all of the Beneficiary's right, title and interest in
                  and to such Beneficiary's Exchangeable Shares and the related
                  interest in the Trust Estate. Any right of each such
                  Beneficiary to receive declared and unpaid dividends from
                  Exchangeco

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                  shall be deemed to be satisfied and discharged and each such
                  Beneficiary shall cease to be a holder of such Exchangeable
                  Shares and Duke Energy shall deliver to the Beneficiary the
                  Exchangeable Share Consideration deliverable upon the
                  automatic exchange of Exchangeable Shares. Concurrently with
                  such Beneficiary ceasing to be a holder of Exchangeable
                  Shares, the Beneficiary shall be considered and deemed for all
                  purposes to be the holder of the Duke Energy Common Shares
                  issued pursuant to the automatic exchange of Exchangeable
                  Shares for Duke Energy Common Shares and the certificates held
                  by the Beneficiary previously representing the Exchangeable
                  Shares exchanged by the Beneficiary with Duke Energy pursuant
                  to such automatic exchange shall thereafter be deemed to
                  represent Duke Energy Common Shares issued to the Beneficiary
                  by Duke Energy pursuant to such automatic exchange. Upon the
                  request of a Beneficiary and the surrender by the Beneficiary
                  of Exchangeable Share certificates deemed to represent Duke
                  Energy Common Shares, duly endorsed in blank and accompanied
                  by such instruments of transfer as Duke Energy may reasonably
                  require, Duke Energy shall deliver or cause to be delivered to
                  the Beneficiary certificates representing Duke Energy Common
                  Shares of which the Beneficiary is the holder.

         5.13     WITHHOLDING RIGHTS

         Duke Energy, Exchangeco and the Trustee shall be entitled to deduct and
withhold from any consideration otherwise payable under this Agreement to any
holder of Exchangeable Shares or Duke Energy Common Shares such amounts as Duke
Energy, Exchangeco or the Trustee is required to deduct and withhold with
respect to such payment under the Income Tax Act (Canada), the United States
Internal Revenue Code of 1986 or any provision of federal, provincial, state,
local or foreign tax law, in each case as amended or succeeded. The Trustee may
act on the advice of counsel with respect to such matters. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
as having been paid to the holder of the shares in respect of which such
deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate taxing authority. To the extent that the
amount so required to be deducted or withheld from any payment to a holder
exceeds the cash portion of the consideration otherwise payable to the holder,
Duke Energy, Exchangeco and the Trustee are hereby authorized to sell or
otherwise dispose of such portion of the consideration as is necessary to
provide sufficient funds to Duke Energy, Exchangeco or the Trustee, as the case
may be, to enable it to comply with such deduction or withholding requirement
and Duke Energy, Exchangeco or the Trustee shall notify the holder thereof and
remit to such holder any unapplied balance of the net proceeds of such sale.
Duke Energy represents and warrants that, based upon facts currently known to
it, it has no current intention, as at the date of this Agreement, to deduct or
withhold from any consideration paid to holders of Exchangeable Shares any
amounts under the United States Internal Revenue Code of 1986.

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                                   ARTICLE 6
                             CONCERNING THE TRUSTEE

         6.1      POWERS AND DUTIES OF THE TRUSTEE

         The rights, powers, duties and authorities of the Trustee under this
Agreement, in its capacity as trustee of the Trust, shall include:

         (a)      receipt and deposit of Duke Energy Common Shares from Duke
                  Energy as trustee for and on behalf of the Beneficiaries in
                  accordance with the provisions of this Agreement;

         (b)      granting proxies and distributing materials to Beneficiaries
                  as provided in this Agreement;

         (c)      casting and exercising the Beneficiary Votes in accordance
                  with the provisions of this Agreement;

         (d)      receiving the grant of the Exchange Right and the Automatic
                  Exchange Rights from Duke Energy as trustee for and on behalf
                  of the Beneficiaries in accordance with the provisions of this
                  Agreement;

         (e)      exercising the Exchange Right and enforcing the benefit of the
                  Automatic Exchange Rights, in each case in accordance with the
                  provisions of this Agreement, and in connection therewith
                  receiving from Beneficiaries Exchangeable Shares and other
                  requisite documents and distributing to such Beneficiaries
                  Duke Energy Common Shares and cheques, if any, to which such
                  Beneficiaries are entitled upon the exercise of the Exchange
                  Right or pursuant to the Automatic Exchange Rights, as the
                  case may be;

         (f)      holding title to the Trust Estate;

         (g)      investing any moneys forming, from time to time, a part of the
                  Trust Estate as provided in this Agreement;

         (h)      taking action on its own initiative or at the direction of a
                  Beneficiary or Beneficiaries to enforce the obligations of
                  Duke Energy and Exchangeco under this Agreement; and

         (i)      taking such other actions and doing such other things as are
                  specifically provided in this Agreement.

         In the exercise of such rights, powers, duties and authorities, the
Trustee shall have (and is granted) such incidental and additional rights,
powers, duties and authority not in conflict with any of the provisions of this
Agreement as the Trustee, acting in good faith and in the reasonable exercise of
its discretion, may deem necessary, appropriate or desirable to effect the
purpose of

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the Trust. Any exercise of such discretionary rights, powers, duties and
authorities by the Trustee shall be final, conclusive and binding upon all
persons.

         The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith and with a view to the best
interests of the Beneficiaries and shall exercise the care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.

         The Trustee shall not be bound to give notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby unless and
until it shall be specifically required to do so under the terms hereof, nor
shall the Trustee be required to take any notice of, or to do, or to take any
act, action or proceeding as a result of any default or breach of any provision
hereunder, unless and until notified in writing of such default or breach, which
notices shall distinctly specify the default or breach desired to be brought to
the attention of the Trustee, and in the absence of such notice the Trustee may
for all purposes of this Agreement conclusively assume that no default or breach
has been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained herein.

         6.2      NO CONFLICT OF INTEREST

         The Trustee represents to Duke Energy and Exchangeco that at the date
of execution and delivery of this Agreement there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder and the role of the
Trustee in any other capacity. The Trustee shall, within 90 days after it
becomes aware that such material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Article 10. If, notwithstanding the foregoing provisions of this
Section 6.2, the Trustee has such a material conflict of interest, the validity
and enforceability of this Agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material conflict of
interest. If the Trustee contravenes the foregoing provisions of this Section
6.2, any interested party may apply to the Court for an order that the Trustee
be replaced as trustee hereunder.

         6.3      DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.

         Duke Energy and Exchangeco irrevocably authorize the Trustee, from time
to time, to:

         (a)      consult, communicate and otherwise deal with the respective
                  registrars and transfer agents, and with any such subsequent
                  registrar or transfer agent, of the Exchangeable Shares and
                  Duke Energy Common Shares; and

         (b)      requisition, from time to time, (i) from any such registrar or
                  transfer agent any information readily available from the
                  records maintained by it which the Trustee may reasonably
                  require for the discharge of its duties and responsibilities
                  under this Agreement and (ii) from the transfer agent of Duke
                  Energy Common Shares, and any subsequent transfer agent of
                  such shares, the share certificates issuable upon the exercise
                  from time to time of the Exchange Right and pursuant to the
                  Automatic Exchange Rights.

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         Duke Energy and Exchangeco irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. Duke Energy
covenants that it will supply its transfer agent with duly executed share
certificates for the purpose of completing the exercise from time to time of the
Exchange Right and the Automatic Exchange Rights.

         6.4      BOOKS AND RECORDS

         The Trustee shall keep available for inspection by Duke Energy and
Exchangeco at the Trustee's principal office in __________ correct and complete
books and records of account relating to the Trust created by this Agreement,
including all relevant data relating to mailings and instructions to and from
Beneficiaries and all transactions pursuant to the Exchange Right and the
Automatic Exchange Rights. On or before January 15, 2002, and on or before
January 15 in every year thereafter, so long as any Duke Energy Common Shares
are on deposit with the Trustee, the Trustee shall transmit to Duke Energy and
Exchangeco a brief report, dated as of the preceding December 31, with respect
to:

         (a)      the property and funds comprising the Trust Estate as of that
                  date;

         (b)      the number of exercises of the Exchange Right, if any, and the
                  aggregate number of Exchangeable Shares received by the
                  Trustee on behalf of Beneficiaries in consideration of the
                  issuance by Duke Energy of Duke Energy Common Shares in
                  connection with the Exchange Right, during the calendar year
                  ended on such December 31; and

         (c)      any action taken by the Trustee in the performance of its
                  duties under this Agreement which it had not previously
                  reported and which, in the Trustee's opinion, materially
                  affects the Trust Estate.

         6.5      INCOME TAX RETURNS AND REPORTS

         The Trustee shall, to the extent necessary, prepare and file on behalf
of the Trust appropriate United States and Canadian income tax returns and any
other returns or reports as may be required by applicable law or pursuant to the
rules and regulations of any securities exchange or other trading system through
which the Exchangeable Shares are traded. In connection therewith, the Trustee
may obtain the advice and assistance of such experts or advisors as the Trustee
reasonably considers necessary or advisable (who may be experts or advisors to
Duke Energy or Exchangeco). If requested by the Trustee, Duke Energy or
Exchangeco shall retain qualified experts or advisors for the purpose of
providing such tax advice or assistance.

         6.6      INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE

         The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this Agreement at the request, order or direction of
any Beneficiary upon such Beneficiary furnishing to the Trustee reasonable
funding, security or indemnity against the costs, expenses and liabilities which
may be incurred by the Trustee therein or thereby, provided that no Beneficiary
shall be obligated to furnish to the Trustee any such security or indemnity in

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connection with the exercise by the Trustee of any of its rights, duties, powers
and authorities with respect to the Duke Energy Common Shares held by the
Trustee pursuant to Article 4, subject to Section 6.15, with respect to the
Exchange Right pursuant to Article 5, subject to Section 6.15, and with respect
to the Automatic Exchange Rights pursuant to Article 5, subject to Section 6.15.

         None of the provisions contained in this Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties, or authorities unless
funded, given security or indemnified as aforesaid.

         6.7      ACTION OF BENEFICIARIES

         No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this Agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
funding, security or indemnity referred to in Section 6.6 and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Beneficiaries shall have any right in any
manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or the Voting Rights, the
Exchange Rights or the Automatic Exchange Rights except subject to the
conditions and in the manner herein provided, and that all powers and trusts
hereunder shall be exercised and all proceedings at law shall be instituted, had
and maintained by the Trustee, except only as herein provided, and in any event
for the equal benefit of all Beneficiaries.

         6.8      RELIANCE UPON DECLARATIONS

         The Trustee shall not be considered to be in contravention of any of
its rights, powers, duties and authorities hereunder if, when required, it acts
and relies in good faith upon statutory declarations, certificates, opinions,
Lists, reports or other papers or documents furnished pursuant to the provisions
hereof or required by the Trustee to be furnished to it in the exercise of its
rights, powers, duties and authorities hereunder if such statutory declarations,
certificates, opinions, Lists, reports or other papers or documents comply with
the provisions of Section 6.9, if applicable, and with any other applicable
provisions of this Agreement.

         6.9      EVIDENCE AND AUTHORITY TO TRUSTEE

         Duke Energy and/or Exchangeco shall furnish to the Trustee evidence of
compliance with the conditions provided for in this Agreement relating to any
action or step required or permitted to be taken by Duke Energy and/or
Exchangeco or the Trustee under this Agreement or as a result of any obligation
imposed under this Agreement, including in respect of the Voting Rights or the
Exchange Right or the Automatic Exchange Rights and the taking of any other
action to be taken by the Trustee at the request of or on the application of
Duke Energy and/or Exchangeco promptly if and when:

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         (a)      such evidence is required by any other section of this
                  Agreement to be furnished to the Trustee in accordance with
                  the terms of this Section 6.9; or

         (b)      the Trustee, in the exercise of its rights, powers, duties and
                  authorities under this Agreement, gives Duke Energy and/or
                  Exchangeco written notice requiring it to furnish such
                  evidence in relation to any particular action or obligation
                  specified in such notice.

         Such evidence shall consist of an Officer's Certificate of Duke Energy
and/or Exchangeco or a statutory declaration or a certificate made by persons
entitled to sign an Officer's Certificate stating that any such condition has
been complied with in accordance with the terms of this Agreement.

         Whenever such evidence relates to a matter other than the Voting Rights
or the Exchange Right or the Automatic Exchange Rights or the taking of any
other action to be taken by the Trustee at the request or on the application of
Duke Energy and/or Exchangeco, and except as otherwise specifically provided
herein, such evidence may consist of a report or opinion of any solicitor,
attorney, auditor, accountant, appraiser, valuer, engineer or other expert or
any other person whose qualifications give authority to a statement made by him,
provided that if such report or opinion is furnished by a director, officer or
employee of Duke Energy and/or Exchangeco it shall be in the form of an
Officer's Certificate or a statutory declaration.

         Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided for
in this Agreement shall include a statement by the person giving the evidence:

         (c)      declaring that such person has read and understands the
                  provisions of this Agreement relating to the condition in
                  question;

         (d)      describing the nature and scope of the examination or
                  investigation upon which such person based the statutory
                  declaration, certificate, statement or opinion; and

         (e)      declaring that such person has made such examination or
                  investigation as such person believes is necessary to enable
                  such person to make the statements or give the opinions
                  contained or expressed therein.

         6.10     EXPERTS, ADVISERS AND AGENTS

         The Trustee may:

         (a)      in relation to these presents act and rely on the opinion or
                  advice of or information obtained from any solicitor,
                  attorney, auditor, accountant, appraiser, valuer, engineer or
                  other expert, whether retained by the Trustee or by Duke
                  Energy and/or Exchangeco or otherwise, and may retain or
                  employ such assistants as may be necessary to the proper
                  discharge of its powers and duties and determination of its
                  rights hereunder and may pay proper and reasonable
                  compensation for all such legal and other advice or assistance
                  as aforesaid; and

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         (b)      employ such agents and other assistants as it may reasonably
                  require for the proper determination and discharge of its
                  powers and duties hereunder, and may pay reasonable
                  remuneration for all services performed for it (and shall be
                  entitled to receive reasonable remuneration for all services
                  performed by it) in the discharge of the trusts hereof and
                  compensation for all disbursements, costs and expenses made or
                  incurred by it in the discharge of its duties hereunder and in
                  the management of the Trust.

         6.11     INVESTMENT OF MONEYS HELD BY TRUSTEE

         Unless otherwise provided in this Agreement, any moneys held by or on
behalf of the Trustee which under the terms of this Agreement may or ought to be
invested or which may be on deposit with the Trustee or which may be in the
hands of the Trustee may be invested and reinvested in the name or under the
control of the Trustee, in trust for Exchangeco, in securities in which, under
the laws of the Province of Ontario, trustees are authorized to invest trust
moneys, provided that such securities are stated to mature within two years
after their purchase by the Trustee, and the Trustee shall so invest such moneys
on the written direction of Exchangeco. Pending the investment of any moneys as
hereinbefore provided, such moneys may be deposited in the name of the Trustee
in any chartered bank in Canada or, with the consent of Exchangeco, in the
deposit department of the Trustee or any other loan or trust company authorized
to accept deposits under the laws of Canada or any province thereof at the rate
of interest then current on similar deposits.

         6.12     TRUSTEE NOT REQUIRED TO GIVE SECURITY

         The Trustee shall not be required to give any bond or security in
respect of the execution of the trusts, rights, duties, powers and authorities
of this Agreement or otherwise in respect of the premises.

         6.13     TRUSTEE NOT BOUND TO ACT ON REQUEST

         Except as in this Agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
Duke Energy and/or Exchangeco or of the directors thereof until a duly
authenticated copy of the instrument or resolution containing such direction or
request shall have been delivered to the Trustee, and the Trustee shall be
empowered to act and rely upon any such copy purporting to be authenticated and
believed by the Trustee to be genuine.

         6.14     AUTHORITY TO CARRY ON BUSINESS

         The Trustee represents to Duke Energy and Exchangeco that at the date
of execution and delivery by it of this Agreement it is authorized to carry on
the business of a trust company in each of the Provinces of Canada but if,
notwithstanding the provisions of this Section 6.14, it ceases to be so
authorized to carry on business, the validity and enforceability of this
Agreement and the Voting Rights, the Exchange Right and the Automatic Exchange
Rights shall not be affected in any manner whatsoever by reason only of such
event but the Trustee shall, within 90 days after ceasing to be authorized to
carry on the business of a trust company in any province of

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Canada, either become so authorized or resign in the manner and with the effect
specified in Article 10.

         6.15     CONFLICTING CLAIMS

         If conflicting claims or demands are made or asserted with respect to
any interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Right or Automatic Exchange Rights subject to such conflicting claims
or demands and, in so doing, the Trustee shall not be or become liable to any
person on account of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be entitled to continue to
refrain from acting and to refuse to act until:

         (a)      the rights of all adverse claimants with respect to the Voting
                  Rights, Exchange Right or Automatic Exchange Rights subject to
                  such conflicting claims or demands have been adjudicated by a
                  final judgment of a court of competent jurisdiction and all
                  rights of appeal have expired; or

         (b)      all differences with respect to the Voting Rights, Exchange
                  Right or Automatic Exchange Rights subject to such conflicting
                  claims or demands have been conclusively settled by a valid
                  written agreement binding on all such adverse claimants, and
                  the Trustee shall have been furnished with an executed copy of
                  such agreement certified to be in full force and effect.

         If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate to fully indemnify it as between all
conflicting claims or demands.

         6.16     ACCEPTANCE OF TRUST

         The Trustee hereby accepts the Trust created and provided for by and in
this Agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various persons who shall from time to time
be Beneficiaries, subject to all the terms and conditions herein set forth.

         6.17     MAINTENANCE OF OFFICE OR AGENCY

         Duke Energy will maintain in Vancouver an office or agency where
certificates representing Exchangeable Shares may be presented or surrendered
for exchange by Beneficiaries and where notices and demands to or upon Duke
Energy or Exchangeco in respect of the Exchangeable Shares may be served. Duke
Energy will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time

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Duke Energy shall fail to maintain any such office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be served at the Corporate Trust Office of the Trustee,
and Duke Energy and Exchangeco hereby appoint the Trustee as their agent to
receive all such presentations, surrenders, notices and demands. Furthermore,
copies of all Duke Energy proxy materials will be made available for inspection
by any Beneficiary at such office or agency.

                                   ARTICLE 7
                                  COMPENSATION

         7.1      FEES AND EXPENSES OF THE TRUSTEE

         Duke Energy and Exchangeco jointly and severally agree to pay the
Trustee reasonable compensation for all of the services rendered by it under
this Agreement and will reimburse the Trustee for all reasonable expenses
(including taxes other than taxes based on the net income of the Trustee, fees
paid to legal counsel and other experts and advisors and travel expenses) and
disbursements, including the cost and expense of any suit or litigation of any
character and any proceedings before any governmental agency reasonably incurred
by the Trustee in connection with its duties under this Agreement; provided that
Duke Energy and Exchangeco shall have no obligation to reimburse the Trustee for
any expenses or disbursements paid, incurred or suffered by the Trustee in any
suit or litigation in which the Trustee is determined to have acted in bad faith
or with negligence, recklessness or willful misconduct.

                                   ARTICLE 8
                   INDEMNIFICATION AND LIMITATION OF LIABILITY

         8.1      INDEMNIFICATION OF THE TRUSTEE

         Duke Energy and Exchangeco jointly and severally agree to indemnify and
hold harmless the Trustee and each of its directors, officers, employees and
agents appointed and acting in accordance with this Agreement (collectively, the
"INDEMNIFIED PARTIES") against all claims, losses, damages, reasonable costs,
penalties, fines and reasonable expenses (including reasonable expenses of the
Trustee's legal counsel) which, without fraud, negligence, recklessness, willful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason or as a result of the
Trustee's acceptance or administration of the Trust, its compliance with its
duties set forth in this Agreement, or any written or oral instruction delivered
to the Trustee by Duke Energy or Exchangeco pursuant hereto.

         In no case shall Duke Energy or Exchangeco be liable under this
indemnity for any claim against any of the Indemnified Parties unless Duke
Energy and Exchangeco shall be notified by the Trustee of the written assertion
of a claim or of any action commenced against the Indemnified Parties, promptly
after any of the Indemnified Parties shall have received any such written
assertion of a claim or shall have been served with a summons or other first
legal process giving information as to the nature and basis of the claim.
Subject to (ii) below, Duke Energy and Exchangeco shall be entitled to
participate at their own expense in the defense and, if Duke Energy and
Exchangeco so elect at any time after receipt of such notice, either of them may

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assume the defense of any suit brought to enforce any such claim. The Trustee
shall have the right to employ separate counsel in any such suit and participate
in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of the Trustee unless: (i) the employment of such counsel has been
authorized by Duke Energy or Exchangeco; or (ii) the named parties to any such
suit include both the Trustee and Duke Energy or Exchangeco and the Trustee
shall have been advised by counsel acceptable to Duke Energy or Exchangeco that
there may be one or more legal defenses available to the Trustee that are
different from or in addition to those available to Duke Energy or Exchangeco
and that, in the judgment of such counsel, would present a conflict of interest
were a joint representation to be undertaken (in which case Duke Energy and
Exchangeco shall not have the right to assume the defense of such suit on behalf
of the Trustee but shall be liable to pay the reasonable fees and expenses of
counsel for the Trustee). This indemnity shall survive the termination of this
Agreement and the resignation or removal of the Trustee.

         8.2      LIMITATION OF LIABILITY

         The Trustee shall not be held liable for any loss which may occur by
reason of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this Agreement, except to the
extent that such loss is attributable to the fraud, negligence, recklessness,
willful misconduct or bad faith on the part of the Trustee.

                                   ARTICLE 9
                                CHANGE OF TRUSTEE

         9.1      RESIGNATION

         The Trustee, or any trustee hereafter appointed, may at any time resign
by giving written notice of such resignation to Duke Energy and Exchangeco
specifying the date on which it desires to resign, provided that such notice
shall not be given less than thirty (30) days before such desired resignation
date unless Duke Energy and Exchangeco otherwise agree and provided further that
such resignation shall not take effect until the date of the appointment of a
successor trustee and the acceptance of such appointment by the successor
trustee. Upon receiving such notice of resignation, Duke Energy and Exchangeco
shall promptly appoint a successor trustee, which shall be a corporation
organized and existing under the laws of the State of New York or the State of
Delaware, by written instrument in duplicate, one copy of which shall be
delivered to the resigning trustee and one copy to the successor trustee.
Failing the appointment and acceptance of a successor trustee, a successor
trustee may be appointed by order of a court of competent jurisdiction upon
application of one or more of the parties to this Agreement. If the retiring
trustee is the party initiating an application for the appointment of a
successor trustee by order of a court of competent jurisdiction, Duke Energy and
Exchangeco shall be jointly and severally liable to reimburse the retiring
trustee for its legal costs and expenses in connection with same.

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         9.2      REMOVAL

         The Trustee, or any trustee hereafter appointed, may (provided a
successor trustee is appointed) be removed at any time on not less than 30 days'
prior notice by written instrument executed by Duke Energy and Exchangeco, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee.

         9.3      SUCCESSOR TRUSTEE

         Any successor trustee appointed as provided under this Agreement shall
execute, acknowledge and deliver to Duke Energy and Exchangeco and to its
predecessor trustee an instrument accepting such appointment. Thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor under this Agreement, with the like effect as if originally named as
trustee in this Agreement. However, on the written request of Duke Energy and
Exchangeco or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of this Agreement,
execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act. Upon the request of any such
successor trustee, Duke Energy, Exchangeco and such predecessor trustee shall
execute any and all instruments in writing for more fully and certainly vesting
in and confirming to such successor trustee all such rights and powers.

         9.4      NOTICE OF SUCCESSOR TRUSTEE

         Upon acceptance of appointment by a successor trustee as provided
herein, Duke Energy and Exchangeco shall cause to be mailed notice of the
succession of such trustee hereunder to each Beneficiary specified in a List. If
Duke Energy or Exchangeco shall fail to cause such notice to be mailed within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of Duke Energy and
Exchangeco.

                                   ARTICLE 10
                             DUKE ENERGY SUCCESSORS

         10.1     CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.

         Duke Energy shall not consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other person or, in the case of a
merger, of the continuing corporation resulting therefrom unless, but may do so
if:

         (a)      such other person or continuing corporation (herein called the
                  "DUKE ENERGY SUCCESSOR"), by operation of law, becomes,
                  without more, bound by the terms and provisions of this
                  Agreement or, if not so bound, executes, prior to or
                  contemporaneously with the consummation of such transaction, a
                  trust agreement

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                  supplemental hereto and such other instruments (if any) as are
                  satisfactory to the Trustee, acting reasonably, and in the
                  opinion of legal counsel to the Trustee are reasonably
                  necessary or advisable to evidence the assumption by the Duke
                  Energy Successor of liability for all moneys payable and
                  property deliverable hereunder and the covenant of such Duke
                  Energy Successor to pay and deliver or cause to be delivered
                  the same and its agreement to observe and perform all the
                  covenants and obligations of Duke Energy under this Agreement;
                  and

         (b)      such transaction shall be upon such terms and conditions as
                  substantially to preserve and not to impair in any material
                  respect any of the rights, duties, powers and authorities of
                  the Trustee or of the Beneficiaries hereunder.

         10.2     VESTING OF POWERS IN SUCCESSOR

         Whenever the conditions of Section 10.1 have been duly observed and
performed, the Trustee, Duke Energy Successor and Exchangeco shall, if required
by Section 10.1, execute and deliver the supplemental trust agreement provided
for in Article 11 and thereupon Duke Energy Successor shall possess and from
time to time may exercise each and every right and power of Duke Energy under
this Agreement in the name of Duke Energy or otherwise and any act or proceeding
by any provision of this Agreement required to be done or performed by the Board
of Directors of Duke Energy or any officers of Duke Energy may be done and
performed with like force and effect by the directors or officers of such Duke
Energy Successor.

         10.3     WHOLLY-OWNED SUBSIDIARIES

         Nothing herein shall be construed as preventing the amalgamation or
merger of any wholly-owned direct or indirect subsidiary of Duke Energy with or
into Duke Energy or the winding-up, liquidation or dissolution of any
wholly-owned subsidiary of Duke Energy provided that all of the assets of such
subsidiary are transferred to Duke Energy or another wholly-owned direct or
indirect subsidiary of Duke Energy and any such transactions are expressly
permitted by this Article 10.

                                   ARTICLE 11
                  AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS

         11.1     AMENDMENTS, MODIFICATIONS, ETC.

         This Agreement may not be amended or modified except by an agreement in
writing executed by Duke Energy, Exchangeco and the Trustee and approved by the
Beneficiaries in accordance with Section 10.2 of the Exchangeable Share
Provisions.

         11.2     MINISTERIAL AMENDMENTS

         Notwithstanding the provisions of Section 11.1, the parties to this
Agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this Agreement for the purposes
of

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         (a)      adding to the covenants of any or all parties hereto for the
                  protection of the Beneficiaries hereunder provided that the
                  Board of Directors of each of Exchangeco and Duke Energy shall
                  be of the good faith opinion that such additions will not be
                  prejudicial to the rights or interests of the Beneficiaries;

         (b)      making such amendments or modifications not inconsistent with
                  this Agreement as may be necessary or desirable with respect
                  to matters or questions which, in the good faith opinion of
                  the Board of Directors of each of Duke Energy and Exchangeco
                  and in the opinion of the Trustee, having in mind the best
                  interests of the Beneficiaries it may be expedient to make,
                  provided that such Boards of Directors and the Trustee, acting
                  on the advice of counsel, shall be of the opinion that such
                  amendments and modifications will not be prejudicial to the
                  interests of the Beneficiaries; or

         (c)      making such changes or corrections which, on the advice of
                  counsel to Duke Energy, Exchangeco and the Trustee, are
                  required for the purpose of curing or correcting any ambiguity
                  or defect or inconsistent provision or clerical omission or
                  mistake or manifest error, provided that the Trustee, acting
                  on the advice of counsel, and the Board of Directors of each
                  of Duke Energy and Exchangeco shall be of the opinion that
                  such changes or corrections will not be prejudicial to the
                  rights and interests of the Beneficiaries.

         11.3     MEETING TO CONSIDER AMENDMENTS

         Exchangeco, at the request of Duke Energy, shall call a meeting or
meetings of the Beneficiaries for the purpose of considering any proposed
amendment or modification requiring approval pursuant hereto. Any such meeting
or meetings shall be called and held in accordance with the by-laws of
Exchangeco, the Exchangeable Share Provisions and all applicable laws.

         11.4     CHANGES IN CAPITAL OF DUKE ENERGY AND EXCHANGECO

         At all times after the occurrence of any event contemplated pursuant to
Section 2.7 or 2.8 of the Support Agreement or otherwise, as a result of which
either Duke Energy Common Shares or the Exchangeable Shares or both are in any
way changed, this Agreement shall forthwith be deemed amended and modified as
necessary in order that it shall apply with full force and effect, mutatis
mutandis, to all new securities into which Duke Energy Common Shares or the
Exchangeable Shares or both are so changed.

         11.5     EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS

         No amendment to or modification or waiver of any of the provisions of
this Agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto. From time to time Exchangeco,
Duke Energy and the Trustee may, subject to the provisions of these presents,
and they shall, when so directed by these presents, execute and deliver by their
proper officers, trust agreements or other instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more of the following
purposes:

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                       VOTING AND EXCHANGE TRUST AGREEMENT
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         (a)      evidencing the succession of Duke Energy Successors and the
                  covenants of and obligations assumed by each such Duke Energy
                  Successor in accordance with the provisions of Article 10 and
                  the successors of any successor trustee in accordance with the
                  provisions of Article 9;

         (b)      making any additions to, deletions from or alterations of the
                  provisions of this Agreement or the Voting Rights, the
                  Exchange Right or the Automatic Exchange Rights which, in the
                  opinion of the Trustee, will not be prejudicial to the
                  interests of the Beneficiaries or are, in the opinion of
                  counsel to the Trustee, necessary or advisable in order to
                  incorporate, reflect or comply with any legislation the
                  provisions of which apply to Duke Energy, Exchangeco, the
                  Trustee or this Agreement; and

         (c)      for any other purposes not inconsistent with the provisions of
                  this Agreement, including to make or evidence any amendment or
                  modification to this Agreement as contemplated hereby,
                  provided that, in the opinion of the Trustee, the rights of
                  the Trustee and Beneficiaries will not be prejudiced thereby.

                                   ARTICLE 12
                                   TERMINATION

         12.1     TERM

         The Trust created by this Agreement shall continue until the earliest
to occur of the following events:

         (a)      no outstanding Exchangeable Shares are held by a Beneficiary;

         (b)      each of Duke Energy and Exchangeco elects in writing to
                  terminate the Trust and such termination is approved by the
                  Beneficiaries in accordance with Section 10.2 of the
                  Exchangeable Share Provisions; and

         (c)      21 years after the death of the last survivor of the
                  descendants of His Majesty King George VI of Canada and the
                  United Kingdom of Great Britain and Northern Ireland living on
                  the date of the creation of the Trust.

         12.2     SURVIVAL OF AGREEMENT

         This Agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Articles 7 and 8 shall
survive any such termination of this Agreement.

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                       VOTING AND EXCHANGE TRUST AGREEMENT
   169

                                   ARTICLE 13
                                     GENERAL

         13.1     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 materially 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
transactions contemplated hereby are fulfilled to the extent possible.

         13.2     ASSIGNMENT

         No party hereto may assign this Agreement or any of its rights,
interests or obligations under this Agreement (whether by operation of law or
otherwise) except that Exchangeco may assign in its sole discretion, any or all
of its rights, interests and obligations hereunder to any wholly-owned
subsidiary of Duke Energy.

         13.3     BINDING EFFECT

         Subject to Section 13.2, this Agreement and the Arrangement shall be
binding upon, enure to the benefit of and be enforceable by the parties hereto
and their respective successors and assigns and to the benefit of the
Beneficiaries.

         13.4     NOTICES TO PARTIES

         All notices and other communications hereunder shall be in writing and
shall be deemed given when delivered personally, telecopied (which is confirmed)
or dispatched (postage prepaid) to a nationally recognized overnight courier
service with overnight delivery instructions, in each case addressed to the
particular party at:

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                       VOTING AND EXCHANGE TRUST AGREEMENT
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         (a)      if to Duke Energy or Exchangeco, at:

                  Duke Energy Corporation
                  422 South Church Street
                  Charlotte, North Carolina 28201-1244

                  Attention: Martha B. Wyrsch   
 
                  Telecopier Number: (303) 605-1605

         (b)      if to the Trustee, at:

                  ---------------------------------------

                  ---------------------------------------

                  ---------------------------------------
                  Attention:                                           
                            -----------------------------
                  Telecopier Number:  (    )     -
                                       ---- ----- -------      

or at such other address of which any party may, from time to time, advise the
other parties by notice in writing given in accordance with the foregoing.

         13.5     NOTICE TO BENEFICIARIES

         Any and all notices to be given and any documents to be sent to any
Beneficiaries may be given or sent to the address of such Beneficiary shown on
the register of holders of Exchangeable Shares in any manner permitted by the
by-laws of Exchangeco from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in such
manner) at the time specified in such by-laws, the provisions of which by-laws
shall apply mutatis mutandis to notices or documents as aforesaid sent to such
Beneficiaries.

         13.6     COUNTERPARTS

         This Agreement may be executed in counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.

         13.7     GOVERNING LAWS; CONSENT TO JURISDICTION

         This Agreement shall be governed by and construed in accordance with
the laws of ______________. Each party hereby irrevocably attorns to the
jurisdiction of the courts of _______________ in respect of all matters arising
under or in relation to this Agreement and Duke Energy hereby appoints
_____________ as its registered office in _______________ as attorney for
service of process.

         13.8     UNITED STATES TAX CHARACTERIZATION

         The parties hereto recognize and intend that, for United States
federal, state and local income, franchise and similar tax purposes, the Trust
will be disregarded as an entity separate

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from Duke Energy pursuant to Treas. Reg. 301.7701-3(b), and no party shall take
any position on any tax return or otherwise that is inconsistent with such
treatment.

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         IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
duly executed as of the date first above written.

                                        DUKE ENERGY CORPORATION

                                        By:     
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title: 
                                              ----------------------------------


                                        EXCHANGECO

                                        By:     
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title: 
                                              ----------------------------------


                                        ---------------------------
                                                                   TRUST COMPANY

                                        By:     
                                           -------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title: 
                                              ----------------------------------

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                       VOTING AND EXCHANGE TRUST AGREEMENT