EXHIBIT 1.1
XXXX-XXXXX CORPORATION
_____ DECS/SM/ (Debt Exchangeable for Common Stock/SM/)*
____% Exchangeable Notes Due __________, 2004
(Subject to Exchange into Shares of Common Stock,
par value $.10 per share, of Devon Energy Corporation)
Underwriting Agreement
New York, New York
July __, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
Credit Suisse First Boston Corporation
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
ABN AMRO Incorporated
As Representatives of the several Underwriters,
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Xxxx-XxXxx Corporation, a Delaware corporation ("Xxxx-XxXxx"),
proposes to sell to the underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, an aggregate of ____ DECS (Debt Exchangeable for Common Stock)
consisting of its ___% Exchangeable Notes Due __________, 2004 (the
"Underwritten DECS"), to be issued under an indenture (the "Indenture") dated as
of _____, 1999 between Xxxx-XxXxx and ________________, as trustee (the
"Trustee"). In addition, the Underwriters will have an option to purchase up to
_____ DECS (the "Option DECS" and, together with the Underwritten DECS, the
"DECS"). At maturity (including as a result of acceleration or otherwise), the
DECS will be mandatorily exchanged by Xxxx-XxXxx into shares of Common Stock,
par value $.10 per share, of Devon Energy Corporation (the "Devon Energy Common
Stock"), an Oklahoma corporation ("Devon Energy") (or, at Xxxx-XxXxx'x option
under the circumstances described in the Final Xxxx-XxXxx Prospectus (as defined
below), cash with an equal value), at the rate specified in the Final Xxxx-XxXxx
Prospectus. To the extent there are no additional Underwriters listed on
Schedule I other than
-------------------
* Plus an option to purchase from Xxxx-XxXxx Corporation, up to _____
additional DECS to cover over-allotments.
you, the term Representatives shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean the singular or the plural as the
context requires.
In connection with the foregoing and pursuant to the Registration
Rights Agreement dated December 31, 1996, as amended, between Devon Energy and
Xxxx-XxXxx (the "Registration Rights Agreement"), Devon Energy has filed with
the Commission a registration statement with respect to ____shares (the
"Underwritten Shares") of Devon Energy Common Stock, in respect of the
Underwritten DECS plus an additional _____ shares (the "Option Shares" and,
together with the Underwritten Shares, the "Shares") of Devon Energy Common
Stock in respect of the Option DECS, for sale by Xxxx-XxXxx as a selling
stockholder (to the extent Xxxx-XxXxx shall so elect to deliver Devon Energy
Common Stock to holders of the DECS at maturity thereof pursuant to the terms of
the DECS), which registration statement is referred to in Section 2 of this
Agreement.
Certain terms used in this Agreement are defined in Section 20 of this
Agreement.
1. Representations and Warranties of Xxxx-XxXxx. (a) Xxxx-XxXxx
represents and warrants to, and agrees with, each Underwriter and Devon Energy
as set forth below in this Section 1.
(i) Xxxx-XxXxx meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act"), has prepared and filed with the
Commission a registration statement (file number 333-76951) on Form S-3,
including a related basic prospectus, for the registration under the
Securities Act of 1933, as amended (the "Act"), of the offering and sale of
the DECS, and such registration statement has been declared effective by
the Commission in the form on file with the Commission on its Effective
Date. Xxxx-XxXxx may have filed one or more amendments thereto, including a
related preliminary prospectus, each of which has previously been furnished
to you. Xxxx-XxXxx will next file with the Commission one of the following:
(1) after the Effective Date of such registration statement, a final
prospectus supplement relating to the DECS in accordance with Rules 430A
and 424(b), (2) prior to the Effective Date of such registration statement,
an amendment to such registration statement (including the form of final
prospectus supplement) or (3) a final prospectus supplement in accordance
with Rules 415 and 424(b). In the case of clause (1), Xxxx-XxXxx has
included in such registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information) required by the Act and
the rules thereunder to be included in such registration statement and the
Final Xxxx-XxXxx Prospectus. As filed, such final prospectus supplement or
such amendment and form of final prospectus supplement shall contain all
Rule 430A Information, together with all other such required information,
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Xxxx-XxXxx Prospectus and
any Preliminary Final Xxxx-XxXxx Prospectus) as Xxxx-XxXxx has advised you,
prior to the Execution Time, will be included or made therein. Such
registration statement, at the Execution Time, meets the requirements set
forth in Rule 415(a)(1)(x).
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(ii) On the Xxxx-XxXxx Effective Date, the Xxxx-XxXxx Registration
Statement did or will, and when the Final Xxxx-XxXxx Prospectus is first
filed in accordance with Rule 424(b) and on the Closing Date (as
hereinafter defined) and on any date on which Option DECS are purchased, if
such date is not the Closing Date (a "settlement date"), the Final Xxxx-
XxXxx Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act, and
the Trust Indenture Act, and the respective rules thereunder; on the Xxxx-
XxXxx Effective Date, the Xxxx-XxXxx Registration Statement did not or will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; on the Xxxx-XxXxx Effective Date and
on the Closing Date the Indenture did or will comply in all material
respects with the applicable requirements of the Trust Indenture Act and
the rules thereunder; and, on the Xxxx-XxXxx Effective Date, the Final
Xxxx-XxXxx Prospectus, if not filed pursuant to Rule 424(b), will not, and
on the date of any filing pursuant to Rule 424(b) and on the Closing Date,
the Final Xxxx-XxXxx Prospectus (together with any supplement thereto) will
not, include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that Xxxx-XxXxx makes no representations or warranties
as to (A) that part of the Xxxx-XxXxx Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) under
the Trust Indenture Act of the Trustee or (B) the information contained in
or omitted from the Xxxx-XxXxx Registration Statement or the Final
Xxxx-XxXxx Prospectus (or any supplement thereto) in reliance upon and in
conformity with information furnished in writing to Xxxx-XxXxx by or on
behalf of any Underwriter through the Representatives specifically for
inclusion in the Xxxx-XxXxx Registration Statement or the Final Xxxx-XxXxx
Prospectus (or any supplement thereto) or (C) the information contained in
or omitted from the Devon Energy Prospectus (attached as Appendix A to the
Preliminary Final Xxxx-XxXxx Prospectus or the Final Xxxx-XxXxx
Prospectus), other than information contained in or omitted from the Devon
Energy Prospectus in reliance upon and in conformity with information
furnished in writing to Devon Energy by Xxxx-XxXxx specifically for
inclusion in the Devon Energy Prospectus.
(iii) Xxxx-XxXxx and each of its subsidiaries which are
significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X) (each, as set forth on Annex A attached hereto, a
"Xxxx-XxXxx Significant Subsidiary," and collectively, the "Xxxx-XxXxx
Significant Subsidiaries") have been duly incorporated and are validly
existing as corporations in good standing under the laws of the
jurisdictions in which they are chartered or organized with full corporate
power and authority to own or lease, as the case may be, and to operate
their properties and conduct their businesses as described in the Final
Xxxx-XxXxx Prospectus, and are duly qualified to do business as foreign
corporations and are in good standing under the laws of each jurisdiction
in which the failure so to qualify would have a material adverse effect on
the [financial condition, results of operations, prospects, earnings or
properties] of Xxxx-XxXxx and its subsidiaries, taken as a whole;
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(iv) All the outstanding shares of capital stock of each Xxxx-
XxXxx Significant Subsidiary have been duly authorized and validly issued
and are fully paid and nonassessable, and, except as otherwise set forth in
the Prospectus, all outstanding shares of capital stock of the Xxxx-XxXxx
Significant Subsidiaries are owned by Xxxx-XxXxx either directly or through
wholly owned subsidiaries free and clear of any perfected security interest
or any other security interests, claims, liens or encumbrances;
(v) The Indenture has been duly authorized and, if the Effective Time
of the Xxxx-XxXxx Registration Statement is prior to the execution and
delivery of this Agreement, has been or otherwise upon such Effective Time
will be duly qualified under the Trust Indenture Act with respect to the
DECS offered thereby; the DECS have been duly authorized; and when DECS
offered are delivered and paid for pursuant to this Agreement on each
Closing Date, the Indenture will have been duly executed and delivered,
such DECS will have been duly executed, authenticated, issued and delivered
and will conform to the description thereof contained in the Final Xxxx-
XxXxx Prospectus and the Indenture and such DECS will constitute valid and
legally binding obligations of Xxxx-XxXxx, enforceable in accordance with
their terms, subject to bankruptcy insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(vi) The DECS have been approved for listing on The New York Stock
Exchange, subject to notice of issuance.
(vii) There is no franchise, contract or other document of a character
required to be described in the Xxxx-XxXxx Registration Statement or Final
Xxxx-XxXxx Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and the statements in the Basic Xxxx-XxXxx
Prospectus under the caption "Description of Debt Securities" and in the
Final Xxxx-XxXxx Prospectus Supplement under the captions "Description of
DECS" and "Certain United States Federal Income Tax Consequences" fairly
summarize the matters therein described.
(viii) This Agreement has been duly authorized, executed and delivered
by Xxxx-XxXxx and constitutes a valid and binding obligation of Xxxx-XxXxx
enforceable in accordance with its terms.
(ix) Xxxx-XxXxx is not and, after giving effect to the offering and
sale of the DECS and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(x) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and the Trust Indenture Act and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the DECS and the Devon Energy
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Common Stock by the Underwriters in the manner contemplated herein and in
the Final Xxxx-XxXxx Prospectus and the Devon Energy Prospectus.
(xi) Neither the issue and sale of the DECS nor the consummation of
any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation or
imposition of any material lien, charge or encumbrance upon any property or
assets of Xxxx-XxXxx or any of its Xxxx-XxXxx Significant Subsidiaries
pursuant to, (i) the charter or by-laws of Xxxx-XxXxx or any of its Xxxx-
XxXxx Significant Subsidiaries, (ii) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to which
Xxxx-XxXxx or any of its Xxxx-XxXxx Significant Subsidiaries is a party or
bound or to which its or their property is subject, or (iii) any statute,
law, rule, regulation, judgment, order or decree applicable to Xxxx-XxXxx
or any of its Xxxx-XxXxx Significant Subsidiaries of any court, regulatory
body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over Xxxx-XxXxx or any of its Xxxx-XxXxx
Significant Subsidiaries or any of its or their properties.
(xii) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving Xxxx-
XxXxx or any of its subsidiaries or its or their property is pending or, to
the best knowledge of Xxxx-XxXxx, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the [financial condition, results of operations, prospects,
earnings or properties] of Xxxx-XxXxx and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final Xxxx-XxXxx
Prospectus (exclusive of any supplement thereto).
(xiii) Neither Xxxx-XxXxx nor any Xxxx-XxXxx Significant Subsidiary is
in violation or default of (i) any provision of its charter or bylaws, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, except if such violation or default with respect to
this clause (ii) could not reasonably be expected to have a material
adverse effect on the [financial condition, results of operations,
prospects, earnings or properties] of Xxxx-XxXxx and its subsidiaries,
taken as a whole, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
Xxxx-XxXxx or such Xxxx-XxXxx Significant Subsidiary or any of its
properties, as applicable, except with respect to this clause (iii) such as
could not reasonably be expected to have a material adverse effect on the
[financial condition, results of operations, prospects, earnings or
properties] of Xxxx-XxXxx and its subsidiaries, taken as a whole.
(xiv) Xxxx-XxXxx and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither Xxxx-XxXxx nor
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any such subsidiary has received any notice of proceedings relating to
the revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
[financial condition, results of operations, prospects, earnings or
properties] of Xxxx-XxXxx and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Final Xxxx-XxXxx Prospectus
(exclusive of any supplement thereto).
(xv) [Xxxx-XxXxx and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a material adverse effect on the [financial
condition, results of operations, prospects, earnings or properties] of
Xxxx-XxXxx and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Final Xxxx-XxXxx Prospectus (exclusive of any
supplement thereto). Except as set forth in the Final Xxxx-XxXxx
Prospectus, neither Xxxx-XxXxx nor any of the subsidiaries has been named
as a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(xvi) In the ordinary course of its business, Xxxx-XxXxx periodically
reviews the effect of Environmental Laws on the business, operations and
properties of Xxxx-XxXxx and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis of
such review, Xxxx XxXxx has reasonably concluded that such associated costs
and liabilities would not, singly or in the aggregate, have a material
adverse effect on the [financial condition, results of operations,
prospects, earnings or properties] of Xxxx XxXxx and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Xxxx-XxXxx Prospectus (exclusive of any supplement thereto).]
(xvii) The subsidiaries listed on Annex A attached hereto are the only
significant subsidiaries of Xxxx-XxXxx as defined by Rule 1-02 of
Regulation S-X.
(xviii) Xxxx-XxXxx and its subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving
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certain dates prior to and any dates after December 31, 1999 (the "Year
2000 Problem"), and has determined that such risk will be remedied on a
timely basis without material expense and will not have a material adverse
effect upon the financial condition and results of operations of Xxxx-XxXxx
and its subsidiaries, taken as a whole; and Xxxx-XxXxx believes, after due
inquiry, that each supplier, vendor, customer or financial service
organization used or serviced by Xxxx-XxXxx and its subsidiaries has
remedied or will remedy on a timely basis the Year 2000 Problem, except to
the extent that a failure to remedy by any such supplier, vendor, customer
or financial service organization would not have a material adverse effect
on Xxxx-XxXxx and its subsidiaries, taken as a whole. Xxxx-XxXxx is in
compliance in all material respects with the Commission Release Nos. 33-
7558 and 33-7609 related to Year 2000 compliance, as amended or
supplemented to date.
(xix) Subsequent to the respective dates as of which information is
presented in the Xxxx-XxXxx Registration Statement and the Final Xxxx-XxXxx
Prospectus, except as otherwise stated therein, there has been no material
adverse change or any development involving a prospective material adverse
change in the condition (financial or otherwise), business, properties or
results of operations of Xxxx-XxXxx and its subsidiaries taken as a whole.
(xx) Xxxx-XxXxx has not taken and will not take, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or
otherwise, in stabilization or manipulation of the price of any security of
Devon Energy to facilitate the sale or resale of the DECS or the Devon
Energy Common Stock and has not effected any sales of Devon Energy Common
Stock which, if effected by the issuer, would be required to be disclosed
in response to Item 701 of Regulation S-K.
(xxi) If Xxxx-XxXxx elects to exchange the DECS for the Shares on the
Exchange Date (as defined in the DECS), then on such Exchange Date it will
be the record and beneficial owner of the Shares to be sold by it hereunder
free and clear of all liens, encumbrances, equities and claims and will
have duly indorsed such Shares in blank, and, assuming that each holder of
DECS acquires its interest in the Shares it receives on the Exchange Date
from Xxxx XxXxx without notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code ("UCC")), upon sale
and delivery of, and payment for, such Shares, as provided herein and in
the terms of the DECS, each such holder will own the Shares, free and clear
of all liens, encumbrances, equities and claims whatsoever.
(b) In respect of any statements in or omissions from the Devon
Energy Registration Statement or the Devon Energy Prospectus or any supplements
thereto made in reliance upon and in conformity with information furnished in
writing to Devon Energy by Xxxx-XxXxx specifically for inclusion therein,
Xxxx-XxXxx makes the same representations and warranties to Devon Energy as
Xxxx-XxXxx makes to each Underwriter under paragraph (a)(ii) of this Section 1.
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2. Representations and Warranties of Devon Energy. Devon Energy
represents and warrants to, and agrees with, each Underwriter and Xxxx-XxXxx as
set forth below in this Section 2.
(a) Devon Energy meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration statement
(file number 333-______) on Form S-3, including a related preliminary
prospectus, for registration under the Act of the offering and sale of the
Shares. Devon Energy may have filed one or more amendments thereto,
including a related preliminary prospectus, each of which has previously
been furnished to you. Devon Energy will next file with the Commission one
of the following: either (1) prior to the Devon Energy Effective Date of
such registration statement, a further amendment to such registration
statement, including the form of final prospectus or (2) after the Devon
Energy Effective Date of such registration statement, a final prospectus in
accordance with Rules 430A and 424(b). In the case of clause (2), Devon
Energy has included in such registration statement, as amended at the Devon
Energy Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in such
registration statement and the Devon Energy Prospectus with respect to the
Shares and the offering thereof. As filed, such amendment and form of
final prospectus, or such final prospectus, shall contain all Rule 430A
Information, together with all other such required information with respect
to the Shares and the offering thereof, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Devon Energy Prospectus) as Devon
Energy has advised you, prior to the Execution Time, will be included or
made therein. Any reference herein to the Devon Energy Registration
Statement, Preliminary Devon Energy Prospectus or the Devon Energy
Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Exchange Act on or before the Devon Energy Effective
Date or the issue date of a Preliminary Devon Energy Prospectus or the
Devon Energy Prospectus, as the case may be; and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the Devon
Energy Registration Statement, any Preliminary Devon Energy Prospectus or
the Devon Energy Prospectus shall be deemed to refer to and include the
filing by Devon Energy of any document under the Exchange Act after the
Devon Energy Effective Date, or the issue date of any Preliminary Devon
Energy Prospectus or the Devon Energy Prospectus, as the case may be,
deemed to be incorporated therein by reference.
(b) On the Devon Energy Effective Date, the Devon Energy Registration
Statement did or will, and when the Devon Energy Prospectus is first filed
(if required) in accordance with Rule 424(b) and on the Closing Date and on
any settlement date (as defined below), the Devon Energy Prospectus (and
any supplements thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the respective
rules thereunder; on the Devon Energy Effective Date and at the Execution
Time, the Devon Energy Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated
8
therein or necessary in order to make the statements therein not
misleading; and, on the Devon Energy Effective Date, the Devon Energy
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the Devon
Energy Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that Devon Energy makes no representations or warranties as to the
information contained in or omitted from the Devon Energy Registration
Statement, or the Devon Energy Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to
Devon Energy (i) by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Devon Energy Registration
Statement or the Devon Energy Prospectus (or any supplement thereto) or
(ii) by Xxxx-XxXxx, in either case, specifically for inclusion in the Devon
Energy Registration Statement or the Devon Energy Prospectus (or any
supplement thereto).
(c) Each of Devon Energy and each of its subsidiaries which are
significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X) (each, as set forth on Annex B attached hereto, a "Devon
Energy Significant Subsidiary," and collectively, the "Devon Energy
Significant Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized with full corporate
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Devon Energy
Prospectus and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction in which the
failure so to qualify would have a material adverse effect on the
[financial condition, results of operations, prospects, earnings or
properties] of Devon Energy and its subsidiaries, taken as a whole.
(d) Devon Energy's authorized equity capitalization is as set forth
in the Devon Energy Prospectus; the capital stock of Devon Energy conforms
in all material respects to the description thereof contained in the Devon
Energy Prospectus; the outstanding shares of Devon Energy Common Stock have
been duly and validly authorized and issued and are fully paid and
nonassessable; the Shares have been duly and validly authorized, and, when
issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Shares are duly
listed, and admitted and authorized for trading, subject to official notice
of issuance, on the American Stock Exchange (the "AMEX"); the certificates
for the Shares are in valid and sufficient form; the holders of outstanding
shares of capital stock of Devon Energy are not entitled to preemptive or
other rights to subscribe for the Shares; and, except as set forth in the
Devon Energy Prospectus, no options, warrants or other rights to purchase,
agreements or other obligations to issue, or rights to convert any
obligations into or exchange any securities for, shares of capital stock of
or ownership interests in Devon Energy are outstanding.
(e) All of the outstanding shares of capital stock of each Devon
Energy Significant Subsidiary have been duly and validly authorized and
issued and are fully
9
paid and nonassessable and, except as otherwise set forth in the Devon
Energy Prospectus, all outstanding shares of capital stock of the Devon
Energy Significant Subsidiaries are owned by Devon Energy either directly
or through wholly-owned subsidiaries free and clear of any perfected
security interests, claims, liens or encumbrances.
(f) This Agreement has been duly authorized, executed and delivered
by Devon Energy and constitutes a valid and binding obligation of Devon
Energy enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights and general principles of equity.
(g) No holders of securities of Devon Energy, other than Xxxx-XxXxx,
have rights to the registration of such securities under the Devon Energy
Registration Statement.
(h) Devon Energy and its subsidiaries are (i) in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) have
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a material adverse effect on the [financial
condition, results of operations, prospects, earnings or properties] of
Devon Energy and its subsidiaries, taken as a whole, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated in the Devon Energy Prospectus (exclusive of any
supplement thereto). Except as set forth in the Devon Energy Prospectus,
neither Devon Energy nor any of the subsidiaries has been named as a
"potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(i) In the ordinary course of its business, Devon Energy periodically
reviews the effect of Environmental Laws on the business, operations and
properties of Devon Energy and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties). On the basis
of such review, Devon Energy has reasonably concluded that such associated
costs and liabilities would not, singly or in the aggregate, have a
material adverse effect on the [financial condition, results of operations,
prospects, earnings or properties] of Devon Energy and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Devon
Energy Prospectus (exclusive of any supplement thereto).
10
(j) No action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company or any of its subsidiaries or its or their property is pending or,
to the best knowledge of the Company, threatened that (i) could reasonably
be expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a material adverse
effect on the [financial condition, results of operations, prospects,
earnings or properties] of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Devon Energy
Prospectus (exclusive of any supplement thereto).
(k) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under
the Act and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution of the Shares
by the Underwriters in the manner contemplated herein and in the Final
Xxxx-XxXxx Prospectus or the Devon Energy Prospectus.
(l) Neither the issue and sale of the Shares nor the consummation by
Devon Energy of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in a breach or
violation or imposition of any material lien, charge or encumbrance upon
any property or assets of Devon Energy or any of its Devon Energy
Significant Subsidiaries pursuant to, (i) the charter or by-laws of Devon
Energy or any of its Devon Energy Significant Subsidiaries, (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement, obligation, condition, covenant or
instrument to which Devon Energy or any of its Devon Energy Significant
Subsidiaries is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to Devon Energy or any of its Devon Energy Significant
Subsidiaries of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
Devon Energy or any of its Devon Energy Significant Subsidiaries or any of
its or their properties.
(m) Devon Energy and its subsidiaries possess all licenses,
certificates, permits and other authorizations issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses as presently conducted, except where the failure to
possess such licenses, certificates, permits or other authorizations would
not, individually or in the aggregate, have a material adverse effect on
the [financial condition, results of operations, prospects, earnings or
properties] of Devon Energy and its subsidiaries, taken as a whole, and
neither Devon Energy nor any such subsidiary has received any notice of
proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a
material adverse effect on the [financial condition, results of operations,
prospects, earnings or properties] of Devon Energy and its subsidiaries,
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Devon
Energy Prospectus (exclusive of any supplement thereto).
11
(o) Devon Energy is not an "investment company" as defined in the
Investment Company Act of 1940, as amended.
(p) Devon Energy and its subsidiaries have implemented a
comprehensive, detailed program to analyze and address the risk that the
computer hardware and software used by them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and has
determined that such risk will be remedied on a timely basis without
material expense and will not have a material adverse effect upon the
financial condition and results of operations of Devon Energy and its
subsidiaries, taken as a whole; and Devon Energy believes, after due
inquiry, that each supplier, vendor, customer or financial service
organization used or serviced by Devon Energy and its subsidiaries has
remedied or will remedy on a timely basis the Year 2000 Problem, except to
the extent that a failure to remedy by any such supplier, vendor, customer
or financial service organization would not have a material adverse effect
on Devon Energy and its subsidiaries, taken as a whole. Devon Energy is in
compliance in all material respects with the Commission Release Nos.
33-7558 and 33-7609 related to Year 2000 compliance, as amended or
supplemented to date.
(q) The Devon Energy Common Stock is duly listed and admitted for
trading on the AMEX.
3. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, Xxxx-XxXxx
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from Xxxx-XxXxx, the number of DECS set forth opposite
that Underwriter's name on Schedule I hereto, at a price of $______ per DECS,
plus accrued interest, if any, on the DECS from _______, 1999 to the Closing
Date.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, Xxxx-XxXxx hereby grants an
option to the several Underwriters to purchase, severally and not jointly, up to
_______ of the Option DECS at the same purchase price as the Underwriters shall
pay for the Underwritten DECS. Said option may be exercised only to cover over-
allotments in the sale of the Underwritten DECS by the Underwriters. Said
option may be exercised in whole or in part at any time (but not more than once)
on or before the 30th day after the date of the Final Xxxx-XxXxx Prospectus upon
written or telegraphic notice by the Representatives to Xxxx-XxXxx setting forth
the number of the Option DECS as to which the several Underwriters are
exercising the option and the settlement date. The number of the Option DECS to
be purchased by each Underwriter shall be the same percentage of the total
number of the Option DECS to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten DECS, subject to such adjustments
as you in your absolute discretion shall make to eliminate any fractional Option
DECS.
4. Delivery and Payment. Delivery of and payment for the
Underwritten DECS and the Option DECS (if the option provided for in Section
3(b) hereof shall have been exercised on or before the third Business Day prior
to the Closing Date) shall be made at 10:00 AM New York City time, on
__________, 1999, or at such time on such later date not more than three
12
Business Days after the foregoing date as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and Xxxx-XxXxx or as provided in Section 11 hereof (such date and time of
delivery and payment for the DECS being herein called the "Closing Date").
Delivery of the DECS shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order
of Xxxx-XxXxx by wire transfer payable in same-day funds to an account specified
by Xxxx-XxXxx. Delivery of the DECS shall be made through the facilities of The
Depository Trust Company unless the Representatives shall otherwise instruct.
If the option provided for in Section 3(b) hereof is exercised after
the third Business Day prior to the Closing Date, Xxxx-XxXxx will deliver the
Option DECS (at the expense of Xxxx-XxXxx) to the Representatives, at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of Xxxx-XxXxx by wire transfer payable in
same-day funds to an account specified by Xxxx-XxXxx. If settlement for the
Option DECS occurs after the Closing Date, Xxxx-XxXxx and Devon Energy will
deliver to the Representatives on the settlement date for the Option DECS, and
the obligation of the Underwriters to purchase the Option DECS shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 7 hereof.
5. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the DECS for sale to the public as set forth in
the Final Xxxx-XxXxx Prospectus.
6. Agreements of Xxxx-XxXxx.
Xxxx-XxXxx agrees with the several Underwriters that:
(a) Prior to the termination of the offering of the DECS, Xxxx-XxXxx
will not file any amendment of the Xxxx-XxXxx Registration Statement or
supplement (including the Final Xxxx-XxXxx Prospectus or any Preliminary
Final Xxxx-XxXxx Prospectus) to the Basic Xxxx-XxXxx Prospectus unless
Xxxx-XxXxx has furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, if the Xxxx-XxXxx
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Final Xxxx-XxXxx Prospectus is otherwise required
under Rule 424(b), Xxxx-XxXxx will cause the Final Xxxx-XxXxx Prospectus,
properly completed, and any supplement thereto to be filed with the
Commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. Xxxx-XxXxx will promptly advise the
Representatives (1) when the Final Xxxx-XxXxx Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (2) when, prior to termination of the offering of
the DECS, any amendment to the Xxxx-XxXxx Registration Statement shall have
been filed or become effective, (3) of any request by the Commission or its
staff for any amendment of the Xxxx-XxXxx
13
Registration Statement or for any supplement to the Final Xxxx-XxXxx
Prospectus or for any additional information, (4) of the issuance by the
Commission of any stop order suspending the effectiveness of the Xxxx-XxXxx
Registration Statement or the institution or threatening of any proceeding
for that purpose and (5) of the receipt by Xxxx-XxXxx of any notification
with respect to the suspension of the qualification of the DECS for sale in
any jurisdiction or the institution or threatening of any proceeding for
such purpose. Xxxx-XxXxx will use its reasonable best efforts to prevent
the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the DECS is
required to be delivered under the Act, any event occurs as a result of
which the Final Xxxx-XxXxx Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances
under which they were made not misleading, or if it shall be necessary to
amend the Xxxx-XxXxx Registration Statement or supplement the Final
Xxxx-XxXxx Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, Xxxx-XxXxx promptly will (1) notify the
Representatives of such event, (2) prepare and file with the Commission,
subject to the second sentence of paragraph (a) of this Section 6, an
amendment or supplement which will correct such statement or omission or
effect such compliance, and (3) supply any supplemented Final Xxxx-XxXxx
Prospectus to you in such quantities as you may reasonably request.
(c) As soon as practicable, Xxxx-XxXxx will make generally available
to its security holders and to the Representatives an earnings statement or
statements of Xxxx-XxXxx and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) Xxxx-XxXxx will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Xxxx-XxXxx
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Xxxx-XxXxx Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Final Xxxx-XxXxx Prospectus and the Final Xxxx-XxXxx Prospectus
and any supplement thereto as the Representatives may reasonably request.
Xxxx-XxXxx will pay the expenses of printing or other production of all
documents relating to the offering.
(e) Xxxx-XxXxx will arrange, if necessary, for the qualification of
the DECS and the Shares for sale under the laws of such jurisdictions as
the Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the DECS and the Shares
and will pay any fee of the National Association of Securities Dealers,
Inc., in connection with its review of the offering; provided that in no
event shall Xxxx-XxXxx be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the DECS or Shares in any jurisdiction where
it is not now so subject.
14
(f) Xxxx-XxXxx will not, without the prior written consent of Xxxxxxx
Xxxxx Xxxxxx Inc., offer, sell, contract to sell, or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by
Xxxx-XxXxx or any affiliate of Xxxx-XxXxx or any person in privity with
Xxxx-XxXxx or any affiliate of Xxxx-XxXxx) directly or indirectly,
including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, any debt securities issued or
guaranteed by Xxxx-XxXxx or publicly announce an intention to effect any
such transaction (other than in connection with the DECS), for a period of
7 days after the date of the Underwriting Agreement.
(g) Xxxx-XxXxx will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of Xxxx-XxXxx to facilitate
the sale or resale of the DECS or the Shares.
7. Agreements of Devon Energy.
Devon Energy agrees with the several Underwriters and Xxxx-XxXxx that:
(a) Devon Energy will use its best efforts to cause the Devon Energy
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the DECS, Devon Energy will not file any amendment of the Devon
Energy Registration Statement or supplement to the Devon Energy Prospectus
unless Devon Energy has furnished you and Xxxx-XxXxx a copy for your review
and Xxxx-XxXxx'x information prior to filing and will not file any such
proposed amendment or supplement to which you or Xxxx-XxXxx reasonably
objects. Subject to the foregoing sentence, if the Devon Energy
Registration Statement has become or becomes effective pursuant to Rule
430A, or filing of the Devon Energy Prospectus is otherwise required under
Rule 424(b), Devon Energy will cause the Devon Energy Prospectus, properly
completed, and any supplement thereto to be filed with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives
and Xxxx-XxXxx of such timely filing. Devon Energy will promptly advise
the Representatives and Xxxx-XxXxx (1) when the Devon Energy Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, shall have become effective, (2) when the Devon Energy Prospectus,
and any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (3) when, prior to termination of the
offering of the Shares, any amendment to the Devon Energy Registration
Statement shall have been filed or become effective, (4) if any request by
the Commission or its staff for any amendment of the Devon Energy
Registration Statement or supplement to the Devon Energy Prospectus or for
any additional information, (5) of the issuance by the Commission of any
stop order suspending the effectiveness of the Devon Energy Registration
Statement or the institution or threatening of any proceeding for that
purpose and (6) of the receipt by Devon Energy of any notification with
respect to the suspension of the qualification of the Shares for sale in
any jurisdiction or the institution or threatening of any proceeding for
such purpose. Devon Energy will use its best efforts to
15
prevent the issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Devon Energy
Common Stock is required to be delivered under the Act, any event occurs as
a result of which the Devon Energy Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend the Devon Energy Registration Statement or supplement
the Devon Energy Prospectus to comply with the Act or the Exchange Act or
the respective rules thereunder, Devon Energy promptly will (1) notify the
Representatives and Xxxx-XxXxx of such event, (2) prepare and file with the
Commission, subject to the second sentence of paragraph (a) of this Section
7, an amendment or supplement which will correct such statement or omission
or effect such compliance, and (3) supply only the supplemented Devon
Energy Prospectus to you in such quantities as you may reasonably request
and supply one copy of the supplemented Devon Energy Prospectus to Xxxx-
XxXxx.
(c) As soon as practicable, Devon Energy will make generally
available to its security holders and to the Representatives an earnings
statement or statements of Devon Energy and its subsidiaries which will
satisfy the provisions of Section 11(a) of the Act and Rule 158 under the
Act.
(d) Devon Energy will furnish to the Representatives and counsel for
the Underwriters and Xxxx-XxXxx and its counsel, without charge, signed
copies of the Devon Energy Registration Statement (including exhibits
thereto) and to each other Underwriter and Xxxx-XxXxx a copy of the Devon
Energy Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by the
Act, as many copies of each Preliminary Devon Energy Prospectus and the
Devon Energy Prospectus and any supplement thereto as the Representatives
may reasonably request. Xxxx-XxXxx will pay the expenses of printing or
other production of all documents relating to the offering.
(e) Devon Energy will, if necessary, cooperate with Xxxx-XxXxx for
purposes of the qualification of the DECS for sale under the laws of such
jurisdictions as the Representatives may designate and maintenance of such
qualifications in effect so long as required for the distribution of the
DECS and the Shares; Devon Energy will arrange for the qualification of the
Shares for sale under the laws of such jurisdictions as the Representatives
may designate and will maintain such qualifications in effect so long as
required for the distribution of the DECS and the Shares; provided, that in
no event shall Devon Energy be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action that
would subject it to service of process in suits, other than those arising
out of the offering or sale of the Shares in any jurisdiction where it is
not now so subject.
(f) Devon Energy and Devon Delaware (as defined below) will not,
without the prior written consent of Xxxxxxx Xxxxx Xxxxxx Inc. (which shall
not be unreasonably
16
withheld), offer, sell, contract to sell, or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by Devon Energy,
Devon Delaware or any affiliate of either of them or any person in privity
with either of them or any affiliate of either of them) directly or
indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish or
increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act,
any shares of common stock or any securities convertible into, or
exchangeable for, or warrants to acquire shares of common stock (other than
the Shares in connection with the offering by Xxxx-XxXxx of the DECS) or
publicly announce an intention to effect any such transaction, on or prior
to the Lockup Termination Date (as defined below); provided, however, that:
(i) Devon Energy or Devon Delaware may publicly announce and
discuss its intention to offer and sell, for up to $500 million,
shares of its capital stock or securities convertible into, or
exchangeable for, or warrants to acquire shares of such capital stock
(any such offering, a "Devon Offering"); and
(ii) Devon Energy or Devon Delaware may file a registration
statement with the Commission relating to a Devon Offering and may
offer the shares to be registered thereby;
provided further, that, for the avoidance of doubt:
(A) Devon Delaware Corporation, a Delaware corporation ("Devon
Delaware"), which is to be renamed Devon Energy Corporation following
the proposed merger of PennzEnergy with Devon Delaware, may issue
shares of its common stock to (1) shareholders of PennzEnergy Company
("PennzEnergy") in the proposed merger of PennzEnergy with Devon
Delaware and (2) shareholders of Devon Energy in the proposed merger
of Devon Oklahoma Corporation, an Oklahoma corporation ("Devon
Oklahoma"), with Devon Energy (each such merger as described in Devon
Energy's proxy statement dated __________, 1999);
(B) Devon Energy or any of its affiliates may offer to issue and
issue shares of its capital stock, or any securities convertible into,
or exchangeable for, or warrants to acquire shares of such capital
stock, in any such case, to any owner of any business or assets
acquired or proposed to be acquired by Devon Energy or any of its
affiliates, as consideration for any such acquisition or proposed
acquisition, and in connection therewith publicly announce any such
issuance or contemplated issuance or file with the Commission any
related registration statement; provided, however, that securities
issuances for other than cash consideration as contemplated by this
paragraph shall not exceed $250 million and, together with any
securities issuances for cash as contemplated above, shall not exceed
$500 million of aggregate securities issuances prior to the Lockup
Termination Date;
17
(C) Devon Energy or Devon Delaware may issue shares of its common
stock in connection with any exchange, redemption or retraction of
Northstar Energy Corporation exchangeable shares; and
(D) Devon Energy, Devon Delaware, PennzEnergy or any of their
respective affiliates may issue shares of capital stock pursuant to
(x) any stock option plan, equity incentive plan, stock purchase plan
or dividend reinvestment plan existing as of July 14, 1999 or as
contemplated by the Amended and Restated Agreement and Plan of Merger,
dated May 19, 1999, by and among Devon Energy, Devon Delaware, Devon
Oklahoma and PennzEnergy and the related Registration Statement on
Form S-4 of Devon Energy, or (y) any security convertible into or
exercisable or exchangeable for any such capital stock outstanding as
of July 14, 1999.
The "Lockup Termination Date" shall be the earlier of (I) the 45th day
after the date of this Agreement or (II) if the Devon Energy Registration
Statement is declared effective by the Commission on or prior to August 2,
1999, September 6, 1999 or (III) if, at Xxxx-XxXxx'x request (assuming
that, in Devon Energy's reasonable judgment, a Devon Energy Registration
Statement is available for filing and would comply with the rules under the
Act), Devon Energy does not (x) file the Devon Energy Registration
Statement with the Commission on or prior to July 16, 1999 or (y) on or
prior to July 22, 1999, request the Commission to declare the Devon Energy
Registration Statement effective, September 6, 1999.
(g) Devon Energy will not take, directly or indirectly, any action
designed to or which has constituted or which might reasonably be expected
to cause or result, under the Exchange Act or otherwise, in stabilization
or manipulation of the price of any security of Devon Energy to facilitate
the sale or resale of the DECS or the Shares.
(h) Devon Energy will furnish the Trustee, in sufficient quantities
for transmission to holders of the DECS, Devon Energy's annual report to
shareholders and reports on Forms 10-K and 10-Q as soon as practicable
after such reports are required to be filed with the Commission.
(i) Devon Energy will take such actions as may be reasonably
necessary to comply with the rules and regulations of the AMEX in respect
of the offering of the Shares contemplated hereby.
(j) Devon Energy will use its reasonable best efforts to furnish to
Xxxx-XxXxx the opinion of McAfee & Xxxx, A Professional Corporation,
counsel for Devon Energy, dated as of the Closing Date, substantially
similar to the opinion to be provided pursuant to Section 8(e) hereof, and
the officers' certificate, dated as of the Closing Date, substantially
similar to the certificate to be provided pursuant to Section 8(g) hereof.
(k) Devon Energy will use its reasonable best efforts to have the
letters of KPMG LLP and Xxxxxx Xxxxxxxx LLP, dated as of the Execution Time
and as of the Closing
18
Date, to be provided pursuant to Section 8(i) and Section 8(j) hereof,
respectively, addressed to Xxxx-XxXxx in addition to the Representatives.
8. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the DECS shall be subject to the
accuracy of the representations and warranties on the part of Xxxx-XxXxx and
Devon Energy contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 4 hereof, to the accuracy of the statements
of Xxxx-XxXxx and Devon Energy made in any certificates pursuant to the
provisions hereof, to the performance by Xxxx-XxXxx and Devon Energy of their
respective obligations hereunder and to the following additional conditions:
(a) If the Devon Energy Registration Statement has not become
effective prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Devon Energy Registration Statement will become
effective not later than (i) 6:00 PM, New York City time, on the date of
determination of the public offering price, if such determination occurred at or
prior to 3:00 PM New York City time, on such date or (ii) 9:30 AM, New York City
time on the Business Day following the day on which the public offering price
was determined, if such determination occurred after 3:00 PM New York City time
on such date; if filing of the Final Xxxx-XxXxx Prospectus or the Devon Energy
Prospectus, or any supplements thereto, is required pursuant to Rule 424(b),
such Final Xxxx-XxXxx Prospectus or Devon Energy Prospectus, and any such
supplements, will be filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the Xxxx-XxXxx
Registration Statement or the Devon Energy Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) (i) Xxxx-XxXxx shall have furnished to the Representatives an
opinion of ____________, corporate counsel for Xxxx-XxXxx, dated as of the
Closing Date and addressed to the Representatives, to the effect that:
(A) each of Xxxx-XxXxx and each of its Xxxx-XxXxx Significant
Subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction in which it
is organized, with full corporate power and authority to own its properties
and conduct its business as described in the Final Xxxx-XxXxx Prospectus,
and is duly qualified to do business as a foreign corporation and is in
good standing under the laws of each jurisdiction in which the failure so
to qualify would have a material adverse effect on the [financial
condition, results of operations, prospects, earnings or properties] of
Xxxx-XxXxx and its subsidiaries, taken as a whole;
(B) all the outstanding shares of capital stock of each of the Xxxx-
XxXxx Significant Subsidiaries, except for director's qualifying shares and
as otherwise set forth in the Xxxx-XxXxx Registration Statement, are owned
by Xxxx-XxXxx either directly or through wholly owned subsidiaries free and
clear of any perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interest, claim, lien or
encumbrance;
(C) Xxxx-XxXxx'x authorized equity capitalization is as set forth in
the Final Xxxx-XxXxx Prospectus; the DECS are duly listed, and admitted and
authorized for
19
trading subject to official notice of issuance, on the AMEX, and, except as
set forth in the Final Xxxx-XxXxx Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of
capital stock of or ownership interests in Xxxx-XxXxx are outstanding;
(D) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving Xxxx-
XxXxx or any of its subsidiaries or its or their property, of a character
required to be disclosed in the Xxxx-XxXxx Registration Statement which is
not adequately disclosed in the Final Xxxx-XxXxx Prospectus, and there is
no franchise, contract or other document of a character required to be
described in the Xxxx-XxXxx Registration Statement or Final Xxxx-XxXxx
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required;
(E) to the best knowledge of such counsel, Xxxx-XxXxx is the record
and beneficial owner of the Shares free and clear of all liens,
encumbrances, equities and claims;
(F) neither the execution and delivery of the Indenture, the issue and
sale of the DECS and the Shares, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of the terms hereof
will conflict with, result in a breach or violation of or imposition of any
lien, charge or encumbrance upon any property or assets of Xxxx-XxXxx or
any Xxxx-XxXxx Significant Subsidiary pursuant to, (i) the charter or by-
laws of Xxxx-XxXxx or any Xxxx-XxXxx Significant Subsidiary, (ii) the terms
of any material indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which Xxxx-XxXxx or any Xxxx-XxXxx Significant
Subsidiary is a party or bound or to which its or their property is
subject, or (iii) any statute, law, rule, regulation, judgment, order or
decree applicable to Xxxx-XxXxx or any Xxxx-XxXxx Significant Subsidiary of
any court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over Xxxx-XxXxx or its
subsidiaries or any of its or their properties; and
(G) no holders of securities of Xxxx-XxXxx have rights to the
registration of such securities under the Xxxx-XxXxx Registration
Statement.
(ii) Xxxx-XxXxx shall have requested and caused Xxxxxxx Xxxxxxx &
Xxxxxxxx, counsel for Xxxx-XxXxx, to have furnished to the Representatives their
opinion dated as of the Closing Date and addressed to the Representatives, to
the effect that:
(A) the statements made in the Basic Xxxx-XxXxx Prospectus under the
caption "Description of Debt Securities" and in the Final Xxxx-XxXxx
Prospectus Supplement under the caption "Description of DECS," insofar as
they purport to constitute summaries of certain terms of documents referred
to therein, constitute accurate summaries of the terms of such documents in
all material respects; the statements set forth under the heading "Certain
United States Federal Income Tax
20
Consequences" in the Final Xxxx-XxXxx Prospectus, insofar as such
statements purport to summarize certain federal income tax laws of the
United States, constitute a fair summary of the principal U.S. federal
income tax consequences of the purchase of DECS by an initial U.S. Holder
(as defined in the Final Xxxx-XxXxx Prospectus);
(B) no consent, approval, authorization, order, registration or
qualification of or with any Federal or New York governmental agency or
body or any Delaware governmental agency or body acting pursuant to the
Delaware General Corporation Law or, to our knowledge, any Federal or New
York court or any Delaware court acting pursuant to the Delaware General
Corporation Law is required for the issue and sale of the DECS by Xxxx-
XxXxx and the compliance by Xxxx-XxXxx with all of the provisions of the
Underwriting Agreement, except for the registration under the Act of the
DECS, and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws
in connection with the purchase and distribution of the DECS by the
Underwriters;
(C) the Indenture has been duly authorized, executed and delivered by
Xxxx-XxXxx and duly qualified under the Trust Indenture Act and, assuming
due authorization, execution and delivery thereof by the Trustee,
constitutes a valid and legally binding obligation of Xxxx-XxXxx
enforceable against Xxxx-XxXxx in accordance with its terms;
(D) the DECS have been duly authorized, executed and issued by Xxxx-
XxXxx and, assuming due authentication thereof by the Trustee and upon
payment and delivery and in accordance with the Underwriting Agreement,
will constitute valid and legally binding obligations of Xxxx-XxXxx
enforceable against Xxxx-XxXxx in accordance with their terms and entitled
to the benefits of the Indenture;
(E) the Xxxx-XxXxx Registration Statement has become effective under
the Act and the Basic Xxxx-XxXxx Prospectus, the Preliminary Final Xxxx-
XxXxx Prospectus and the Final Xxxx-XxXxx Prospectus Supplement were each
filed pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act and, to our knowledge, no stop order suspending
the effectiveness of the Xxxx-XxXxx Registration Statement has been issued
or proceeding for that purpose has been instituted or threatened by the
Commission;
(F) the Underwriting Agreement has been duly authorized, executed and
delivered by Xxxx-XxXxx;
(G) Xxxx-XxXxx is not and, after giving effect to the offering and
sale of the DECS and the application of the proceeds thereof as described
in the Final Xxxx-XxXxx Prospectus, will not be an "investment company"
within the meaning of and subject to regulation under the Investment
Company Act of 1940, as amended; and
(H) such counsel has not independently verified the accuracy,
completeness or fairness of the statements made or included in the Xxxx-
XxXxx Registration Statement and the Final Xxxx-XxXxx Prospectus or the
documents incorporated by reference therein
21
and takes no responsibility therefor, except as and to the extent set forth
in paragraph (A) above. Such counsel shall also state that in the course of
the preparation by Xxxx-XxXxx of the Xxxx-XxXxx Registration Statement and
the Final Xxxx-XxXxx Prospectus, excluding the documents incorporated
therein by reference, such counsel participated in conferences with certain
officers and employees of Xxxx-XxXxx, with representatives of Xxxxxx
Xxxxxxxx and counsel to Xxxx-XxXxx. Such opinion shall also state that such
counsel did not participate in the preparation of documents incorporated by
reference in the Final Xxxx-XxXxx Prospectus. Based upon such counsel's
examination of the Xxxx-XxXxx Registration Statement and the Final
Xxxx-XxXxx Prospectus and the documents incorporated by reference therein,
and such counsel's investigations made in connection with the preparation
of the Xxxx-XxXxx Registration Statement and the Final Xxxx-XxXxx
Prospectus, including any documents incorporated by reference therein and
such counsel's participation in conferences referred to above, (i) such
counsel is of the opinion that the Xxxx-XxXxx Registration Statement, as of
its effective date, and the Final Xxxx-XxXxx Prospectus, as of its date,
complied as to form in all material respects with requirements of the Act,
the Trust Indenture Act and the applicable rules and regulations of the
Commission thereunder and that the documents incorporated by reference in
the Final Xxxx-XxXxx Prospectus complied as to form when filed in all
material respects with the requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder, except that,
in each case, such counsel need not express an opinion with respect to the
financial statements or other financial data contained or incorporated by
reference in the Xxxx-XxXxx Registration Statement, the Final Xxxx-XxXxx
Prospectus or the documents incorporated by reference in the Final
Xxxx-XxXxx Prospectus, and (ii) such counsel has no reason to believe that
the Xxxx-XxXxx Registration Statement, as of its effective date, contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading or that the Final Xxxx-XxXxx Prospectus
(including the documents incorporated by reference therein) contains any
untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in
each case, such counsel need not express a belief with respect to the
financial statements or other financial data contained or incorporated by
reference in the Xxxx-XxXxx Registration Statement, the Final Xxxx-XxXxx
Prospectus or the documents incorporated by reference into the Final
Xxxx-XxXxx Prospectus.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the States of
New York and Delaware or the United States, to the extent such counsel deems
proper and specified in such opinion, upon the opinion of other counsel of good
standing whom such counsel believes to be reliable and who are satisfactory to
counsel for the Underwriters and (B) as to matters of fact, to the extent such
counsel deems proper, on certificates of responsible officers of Xxxx-XxXxx and
public officials. References to the Final Xxxx-XxXxx Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Representatives shall have received from Cleary, Gottlieb,
Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with
22
respect to the issuance and sale of the DECS, the Indenture, the Xxxx-XxXxx
Registration Statement, the Final Xxxx-XxXxx Prospectus (together with any
supplement thereto), the Shares, the Devon Energy Registration Statement, the
Devon Energy Prospectus (together with any supplement thereto) and other related
matters as the Representatives may reasonably require, and Xxxx-XxXxx and Devon
Energy shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(d) Devon Energy shall have furnished to the Representatives the
opinion of McAfee & Xxxx, a Professional Corporation, counsel for Devon Energy,
dated as of the Closing Date, to the effect that:
(i) each of Devon Energy and each of its subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its properties and conduct
its business as described in the Devon Energy Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification
wherein it owns or leases material properties or conducts material business
as listed in the Devon Energy Prospectus, except where the failure to
qualify would not have a material adverse effect on the [financial
condition, results of operations, prospects, earnings or properties] of
Devon Energy and its consolidated subsidiaries, taken as a whole;
(ii) all the outstanding shares of capital stock of each subsidiary
have been duly and validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Devon Energy
Prospectus, all outstanding shares of capital stock of the subsidiaries are
owned by Devon Energy either directly or through wholly owned subsidiaries
free and clear of any perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security interests, claims,
liens or encumbrances;
(iii) Devon Energy's authorized equity capitalization is as set forth
in the Devon Energy Prospectus; the Shares are duly listed and admitted for
trading on the AMEX; the Devon Energy Common Stock conforms in all material
respects to the description thereof contained in the Devon Energy
Prospectus; the outstanding shares of Devon Energy Common Stock (including
the Shares) have been duly and validly authorized and issued and are fully
paid and non-assessable; the certificates for the Shares are in valid and
sufficient form;
(iv) to the best knowledge of such counsel, there is no pending or
threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving Devon Energy or any
of its subsidiaries of a character required to be disclosed in the Devon
Energy Registration Statement which is not adequately disclosed in the
Devon Energy Prospectus, and there is no franchise, contract or other
document of a character required to be described in the Devon Energy
Registration Statement or Devon Energy Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the statements in
the Devon Energy Prospectus under
23
the headings "Description of Capital Stock" fairly summarize the matters
therein described;
(v) the Devon Energy Registration Statement has become effective
under the Act; any required filing of the Devon Energy Prospectus, and of
any supplements thereto, pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the effectiveness of
the Devon Energy Registration Statement has been issued, no proceedings for
that purpose have been instituted or threatened;
(vi) this Agreement has been duly authorized, executed and delivered
by Devon Energy;
(vii) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by Devon
Energy of the transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
DECS by the Underwriters and the distribution of the Shares pursuant to the
terms of the DECS and such other approvals (specified in such opinion) as
have been obtained;
(viii) neither the distribution of the Shares, nor the consummation
of any other of the transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws of Devon
Energy or the terms of any indenture or other agreement or instrument known
to such counsel and to which Devon Energy or any of its subsidiaries is a
party or bound or any judgment, order or decree known to such counsel to be
applicable to Devon Energy or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or arbitrator
having jurisdiction over Devon Energy or any of its subsidiaries; and
(ix) No holders of securities of Devon Energy, other than Xxxx-XxXxx,
have rights to the registration of Devon Energy Common Stock under the
Devon Energy Registration Statement.
In addition such counsel shall state that, although such counsel makes no
representation as to the accuracy or completeness of the statements of fact
contained in the Devon Energy Registration Statement and the Devon Energy
Prospectus, no facts have come to such counsel's attention which lead such
counsel to believe that, at the Devon Energy Effective Date, the Devon Energy
Registration Statement and the Devon Energy Prospectus (other than the financial
statements and other financial or accounting information contained therein or
omitted therefrom as to which such counsel need express no opinion) did not
comply as to form in all material respects with the applicable requirements of
the Act and the Exchange Act and the respective rules thereunder; and such
counsel has no reason to believe that at the Devon Energy Effective Date the
Devon Energy Registration Statement (other than the financial statements and
other financial or accounting information included therein or omitted therefrom
as to which such counsel need express no opinion) contained any untrue statement
of a material fact or omitted to
24
state any material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Devon Energy Prospectus (other
than the financial statements and other financial or accounting information
included therein or omitted therefrom as to which such counsel need express no
opinion) includes any untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Oklahoma or the United States, to the extent such counsel deems proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom such counsel believes to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of Devon Energy and public
officials. References to the Devon Energy Prospectus in this paragraph (d)
include any supplements thereto at the Closing Date.
(e) Xxxx-XxXxx shall have furnished to the Representatives a
certificate of Xxxx-XxXxx, signed by the Chairman of the Board or the President
and the principal financial or accounting officer of Xxxx-XxXxx, dated the
Closing Date, to the effect that the signers, of such certificate have carefully
examined the Xxxx-XxXxx Registration Statement, the Final Xxxx-XxXxx Prospectus,
any supplements to the Final Xxxx-XxXxx Prospectus and this Agreement and that:
(i) the representations and warranties of Xxxx-XxXxx in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and Xxxx-
XxXxx has complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Xxxx-XxXxx
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to Xxxx-XxXxx'x knowledge, threatened; and
(iii) since the date of the most recent financial statements included
or incorporated by reference in the Final Xxxx-XxXxx Prospectus (exclusive
of any supplement thereto), there has been no material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of Xxxx-XxXxx and its subsidiaries taken as a whole, whether or
not arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Xxxx-XxXxx Prospectus (exclusive
of any supplement thereto).
(f) Devon Energy shall have furnished to the Representatives a
certificate of Devon Energy, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of Devon Energy,
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Devon Energy Registration Statement, the Devon Energy
Prospectus, any supplements to the Devon Energy Prospectus and this Agreement
and that:
25
(i) the representations and warranties of Devon Energy in this
Agreement are true and correct in all material respects on and as of the
Closing Date with the same effect as if made on the Closing Date and Devon
Energy has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the Devon Energy
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to Devon Energy's knowledge, threatened; and
(iii) since the date of the most recent financial statements included
or incorporated by reference in the Devon Energy Prospectus (exclusive of
any supplement thereto), there has been no material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of Devon Energy and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Devon Energy Prospectus (exclusive
of any supplement thereto).
(g) Xxxx-XxXxx shall have requested and caused Xxxxxx Xxxxxxxx LLP to
have furnished to the Representatives at the Execution Time and at the Closing
Date, letters, dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the Representatives, confirming that
they are independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable rules and regulations adopted by the
Commission thereunder and that they have performed a review of the unaudited
interim financial information of Xxxx-XxXxx for the three-month period ended
March 31, 1999, and as at March 31, 1999, in accordance with Statement on
Auditing Standards No. 71, and stating in effect that:
(i) in their opinion the audited financial statements and financial
statement schedules included or incorporated in the Xxxx-XxXxx Registration
Statement and the Final Xxxx-XxXxx Prospectus and reported on by them
comply in form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by the Xxxx-XxXxx and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the three-month period ended March 31, 1999, and as at March 31, 1999;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments set
forth in such letter; a reading of the minutes of the meetings of the
stockholders, directors and [executive, finance, audit] committees of Xxxx-
XxXxx and its subsidiaries; and inquiries of certain officials of Xxxx-
XxXxx who have responsibility for financial and accounting matters of Xxxx-
XxXxx and its subsidiaries as to transactions and events subsequent to
December 31, 1998, nothing came to their attention which caused them to
believe that:
26
(1) any unaudited financial statements included or incorporated
by reference in the Xxxx-XxXxx Registration Statement and the Final
Xxxx-XxXxx Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and with
the related rules and regulations adopted by the Commission with
respect to financial statements included or incorporated by reference
in quarterly reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included or
incorporated by reference in the Xxxx-XxXxx Registration Statement and
the Final Xxxx-XxXxx Prospectus;
(2) with respect to the period subsequent to March 31, 1999,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the [long-term debt] of Xxxx-XxXxx
and its subsidiaries or, capital stock of Xxxx-XxXxx, or decreases in
the [stockholders' equity] of Xxxx-XxXxx, [other appropriate line
items] as compared with the amounts shown on the March 31, 1999
consolidated balance sheet included or incorporated in the Xxxx-XxXxx
Registration Statement and the Final Xxxx-XxXxx Prospectus, or for the
period from April 1, 1999 to such specified date there were any
decreases, as compared with the corresponding period in the preceding
year in [consolidated revenues, net income or net income per share] of
Xxxx-XxXxx and its subsidiaries, except in all instances for changes
or decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by Xxxx-XxXxx as to the significance
thereof unless said explanation is not deemed necessary by the
Representatives;
(3) the information included or incorporation by reference in the
Xxxx-XxXxx Registration Statement and the Final Xxxx-XxXxx Prospectus
in response to Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges) is
not in conformity with the applicable disclosure requirements of
Regulation S-K.
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of
Xxxx-XxXxx and its subsidiaries) set forth in the Xxxx-XxXxx Registration
Statement and the Final Xxxx-XxXxx Prospectus and in Exhibit 12 to the
Xxxx-XxXxx Registration Statement, including the information set forth under the
captions "[ ]" and "[ ]"in the Final Xxxx-XxXxx Prospectus, the
information included or incorporated by reference in Items [ ] of Xxxx-XxXxx'x
Annual Report on Form 10-K, incorporated by reference in the Xxxx-XxXxx
Registration Statement and the Final Xxxx-XxXxx Prospectus, agrees with the
accounting records of Xxxx-XxXxx and its subsidiaries, excluding any questions
of legal interpretation.
References to the Final Xxxx-XxXxx Prospectus in this paragraph (g) include any
supplement thereto at the date of the letter.
27
(h) Devon Energy shall have requested and caused KPMG LLP to have
furnished to the Representatives, at the Execution Time and at the Closing Date,
letters, dated respectively as of the Execution Time and as of the Closing Date,
in form and substance reasonably satisfactory to the Representatives, confirming
that they are independent accountants within the meaning of the Act and the
respective applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of the unaudited interim financial
information of Devon Energy for the three-month period ended March 31, 1999 and
as at March 31, 1999 in accordance with Statement on Auditing Standards No. 71,
and stating in effect that:
(i) in their opinion the audited financial statements of Devon Energy
included or incorporated by reference in the Devon Energy Registration
Statement and the Devon Energy Prospectus and reported on by them comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by Devon Energy and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
of Devon Energy for the three-month period ended March 31, 1999, and as at
March 31, 1999; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the meetings
of the stockholders, directors and all board committees of Devon Energy and
its subsidiaries; and inquiries of certain officials of Devon Energy who
have responsibility for financial and accounting matters of Devon Energy
and its subsidiaries as to transactions and events subsequent to December
31, 1998, nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements of Devon Energy included
or incorporated in the Devon Energy Registration Statement and the
Devon Energy Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and with
the related rules and regulations adopted by the Commission with
respect to financial statements of Devon Energy included in quarterly
reports on Form 10-Q under the Exchange Act; and said unaudited
financial statements are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with
that of the audited financial statements of Devon Energy included or
incorporated by reference in the Devon Energy Registration Statement
and the Devon Energy Prospectus; or
(2) with respect to the period subsequent to March 31, 1999,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of Devon Energy
or capital stock of Devon Energy, or any decreases in stockholders'
equity of Devon Energy, as compared with the amounts shown on the
March 31, 1999 consolidated balance sheet of Devon Energy included or
incorporated by reference in the Devon Energy Registration Statement
and the Devon Energy Prospectus, or for the period from April 1, 1999
28
to such specified date there were any decreases, as compared with the
corresponding period in the preceding year in consolidated total
revenues, net income or in the total or per-share amounts of net
income, except in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by Devon Energy as to the significance thereof unless said
explanation is not deemed necessary by the Representatives.
(3) the information included or incorporated by reference in the
Devon Energy Registration Statement and the Devon Energy Prospectus in
response to Regulation S-K, Item 301 (Selected Financial Data), Item
302 (Supplementary Financial Information), Item 402 (Executive
Compensation) and Item 503(d) (Ratio of Earnings to Fixed Charges) is
not in conformity with the applicable disclosure requirements of
Regulation S-K.
(iii) they have performed certain other specified procedures as a
result of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to historical accounting,
financial or statistical information derived from the general accounting
records of Devon Energy and its subsidiaries) set forth in the Devon Energy
Registration Statement and the Devon Energy Prospectus, including the
information set forth under the caption "Selected Financial Information" in
the Devon Energy Prospectus, the information included or incorporated by
reference in Items 1, 2, 6, 7 and 11 of Devon Energy's Annual Report on
Form 10-K, incorporated by reference in the Devon Energy Registration
Statement and the Devon Energy Prospectus, and the information included in
the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated by reference in Devon
Energy's Quarterly Reports on Form 10-Q, incorporated by reference in the
Devon Energy Registration Statement and the Devon Energy Prospectus, agrees
with the accounting records of Devon Energy and its subsidiaries, excluding
any questions of legal interpretation.
References to the Devon Energy Prospectus in this paragraph (h) include any
supplement thereto at the date of the letter.
(i) Devon Energy shall have requested that PennzEnergy cause Xxxxxx
Xxxxxxxx LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance reasonably satisfactory to the
Representatives, confirming that they are independent accountants within the
meaning of the Act and the respective applicable rules and regulations adopted
by the Commission thereunder and that they have performed a review of the
unaudited interim financial information of PennzEnergy for the three-month
period ended March 31, 1999 and as at March 31, 1999 in accordance with
Statement on Auditing Standards No. 71, and stating in effect that:
(i) in their opinion the audited financial statements included or
incorporated by reference in the Devon Energy Registration Statement and
the Devon Energy Prospectus and reported on by them comply as to form in
all material respects with the applicable
29
accounting requirements of the Act and the Exchange Act and the related
rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial
statements made available by PennzEnergy and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information
for the three-month period ended March 31, 1999, and as at March 31, 1999;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the comments set
forth in such letter; a reading of the minutes of the meetings of the
stockholders, directors and all board committees of PennzEnergy and its
subsidiaries; and inquiries of certain officials of PennzEnergy who have
responsibility for financial and accounting matters of PennzEnergy and its
subsidiaries as to transactions and events subsequent to December 31, 1998,
nothing came to their attention which caused them to believe that:
(1) any unaudited financial statements of PennzEnergy included
or incorporated in the Devon Energy Registration Statement and the
Devon Energy Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act and with
the related rules and regulations adopted by the Commission with
respect to financial statements included in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial statements
are not in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited
financial statements of PennzEnergy included or incorporated by
reference in the Devon Energy Registration Statement and the Devon
Energy Prospectus; or
(2) with respect to the period subsequent to March 31, 1999,
there were any changes, at a specified date not more than five days
prior to the date of the letter, in the long-term debt of PennzEnergy
or capital stock of PennzEnergy, or any decreases in stockholders'
equity of PennzEnergy, as compared with the amounts shown on the March
31, 1999 consolidated balance sheet of PennzEnergy included or
incorporated by reference in the Devon Energy Registration Statement
and the Devon Energy Prospectus, or for the period from April 1, 1999
to such specified date there were any decreases, as compared with the
corresponding period in the preceding year in consolidated total
revenues, net income or in the total or per-share amounts of net
income, except in all instances for changes or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by PennzEnergy as to the significance thereof unless said
explanation is not deemed necessary by the Representatives.
References to the Devon Energy Prospectus in this paragraph (i) include any
supplement thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in each of the Xxxx-XxXxx Registration Statement and
the Devon Energy Registration Statement (exclusive of any amendment thereof) and
each of the Final Xxxx-XxXxx
30
Prospectus and the Devon Energy Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraphs (g), (h) and (i) of this Section 8
or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of either Xxxx-XxXxx or Devon Energy and their respective
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in each of
the Final Xxxx-XxXxx Prospectus and the Devon Energy Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the DECS as contemplated by each of the Xxxx-XxXxx
Registration Statement and the Devon Energy Registration Statement (exclusive of
any amendment thereof) and each of the Final Xxxx-XxXxx Prospectus and the Devon
Energy Prospectus (exclusive of any supplement thereto).
(k) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of Xxxx-XxXxx'x or Devon Energy's debt securities
by any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(l) Prior to the Closing Date, each of Xxxx-XxXxx and Devon Energy
shall have furnished to the Representatives such further information,
certificates and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 8 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of
such cancellation shall be given to Xxxx-XxXxx and Devon Energy in writing or by
telephone or facsimile confirmed in writing.
9. Reimbursement of Underwriters' Expenses. If the sale of the DECS
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 8 hereof is not satisfied, because of
any termination pursuant to Section 12 hereof or because of any refusal,
inability or failure on the part of Xxxx-XxXxx or Devon Energy to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, Xxxx-XxXxx will reimburse the Underwriters
severally upon demand for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the DECS. The
Underwriters agree to pay such expenses, fees and disbursements in any other
event. In no event xxxx Xxxx-XxXxx be liable to any of the Underwriters for
damages on account of loss of anticipated profits.
10. Indemnification and Contribution. (a) Xxxx-XxXxx agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each
31
Underwriter, and each person who controls any Underwriter within the meaning of
either the Act or the Exchange Act against any and all losses, claims, damages
or liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material fact
contained in the Xxxx-XxXxx Registration Statement as originally filed or in any
amendment thereof, or in the Basic Xxxx-XxXxx Prospectus, any Preliminary Final
Xxxx-XxXxx Prospectus or the Final Xxxx-XxXxx Prospectus (including any
information contained in or omitted from any Preliminary Devon Energy Prospectus
or Devon Energy Prospectus in reliance on and in conformity with information
furnished to Devon Energy by Xxxx-XxXxx), or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that Xxxx-
XxXxx will not be liable under the indemnity agreement in this paragraph (a) to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to Xxxx-XxXxx by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein or in reliance and in
conformity with the Statement of Eligibility of the Trustee; provided, further,
that Xxxx-XxXxx will not be liable under the indemnity agreement in this
paragraph (a) to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to Xxxx-XxXxx by Devon Energy
specifically for inclusion therein (including the information contained in any
Preliminary Devon Energy Prospectus or Devon Energy Prospectus included in any
such document (other than information contained in or omitted from any such
Preliminary Devon Energy Prospectus or Devon Energy Prospectus in reliance on
and conformity with information furnished to Devon Energy by Xxxx-XxXxx
specifically for inclusion therein)); and provided, further that Xxxx-XxXxx
shall not be liable to any Underwriter under the indemnity agreement in this
paragraph (a) with respect to the Preliminary Final Xxxx-XxXxx Prospectus to the
extent that any such loss, claim, damage or liability of such Underwriter
results from the fact that such Underwriter sold DECS to a person as to whom it
shall be established that there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the Final Xxxx-XxXxx Prospectus
(excluding documents incorporated by reference), as the case may be, or of the
Final Xxxx-XxXxx Prospectus as then amended or supplemented (excluding documents
incorporated by reference) in any case where such delivery is required by the
Act and where Xxxx-XxXxx has previously furnished copies thereof in sufficient
quantity to such Underwriter and the loss, claim, damage or liability of such
Underwriter results from an untrue statement or omission of a material fact
contained in the Final Preliminary Xxxx-XxXxx Prospectus and corrected in the
Final Xxxx-XxXxx Prospectus (excluding documents incorporated by reference) or
in the Final Xxxx-XxXxx Prospectus as then amended or supplemented (excluding
documents incorporated by reference). This indemnity agreement will be in
addition to any liability which Xxxx-XxXxx may otherwise have.
32
(b) Xxxx-XxXxx agrees to indemnify and hold harmless Devon Energy,
each of its directors, each of its officers who signs the Devon Energy
Registration Statement, and each person who controls Devon Energy within the
meaning of either the Act or the Exchange Act, against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Devon Energy Registration Statement as originally filed or
in any amendment thereof, or in the Preliminary Devon Energy Prospectus or the
Devon Energy Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission is
made in reliance upon and in conformity with written information furnished in
writing to Devon Energy by Xxxx-XxXxx specifically for inclusion therein, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. The indemnity
agreement shall be in addition to any liability which Xxxx-XxXxx may otherwise
have.
(c) Devon Energy agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter,
and each person who controls any Underwriter within the meaning of either the
Act or the Exchange Act and Devon Energy agrees to indemnify and hold harmless
Xxxx-XxXxx, the directors, officers, employees and agents of Xxxx-XxXxx, and
each person who controls Xxxx-XxXxx within the meaning of either the Act or the
Exchange Act, in either case, against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
(i) the Devon Energy Registration Statement as originally filed or in any
amendment thereof, or in any Preliminary Devon Energy Prospectus or the Devon
Energy Prospectus, or in any amendment thereof or supplement thereto, or (ii)
the Xxxx-XxXxx Registration Statement as originally filed or in any amendment
thereof, or in any Preliminary Final Xxxx-XxXxx Prospectus or the Final Xxxx-
XxXxx Prospectus, or in any amendment thereto or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in the
documents referred to in clause (i) or (ii) above a material fact required to be
stated in the documents referred to in clause (i) or (ii) above or necessary to
make the statements therein not misleading, but in the case of the documents
referred to clause (ii) only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished in writing to Xxxx-XxXxx by
Devon Energy specifically for inclusion therein (including the information
contained in any Preliminary Devon Energy Prospectus or Devon Energy Prospectus
included in any such document (other than information contained in or omitted
from any such Preliminary Devon Energy Prospectus or Devon Energy Prospectus in
reliance on and conformity with information furnished to Devon Energy by Xxxx-
XxXxx specifically for inclusion therein)), and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with
33
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that Devon Energy will not be liable under the indemnity
agreement in this paragraph (c) to the extent that any such loss, claim, damage
or liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the documents referred
to in clause (i) above in reliance upon and in conformity with written
information furnished to Devon Energy by or on behalf of any Underwriter through
the Representatives specifically for inclusion therein; provided, further that
Devon Energy shall not be liable under the indemnity agreement in this paragraph
(c) to the extent that any such loss, claim, damage or liability arises out of
or is based on any such untrue statement or alleged untrue statement or omission
or alleged omission made in the documents referred to in clause (i) above in
reliance upon and in conformity with written information furnished to Devon
Energy by Xxxx-XxXxx specifically for inclusion therein; and provided, further
Devon Energy shall not be liable to any Underwriter under the indemnity
agreement in this paragraph (c) with respect to the Preliminary Devon Energy
Prospectus to the extent that any such loss, claim, damage or liability of such
Underwriter results from the fact that such Underwriter sold DECS to a person as
to whom it shall be established that there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the Devon Energy Prospectus
(excluding documents incorporated by reference) or of the Devon Energy
Prospectus as then amended or supplemented (excluding documents incorporated by
reference), as the case may be, in any case where such delivery is required by
the Act and where Devon Energy has previously furnished copies thereof in
sufficient quantity to such Underwriter and the loss, claim, damage or liability
of such Underwriter results from an untrue statement or omission of a material
fact contained in the Preliminary Devon Energy Prospectus and corrected in the
Devon Energy Prospectus (excluding documents incorporated by reference) or in
the Devon Energy Prospectus as then amended or supplemented (excluding documents
incorporated by reference). This indemnity agreement will be in addition to any
liability which Devon Energy may otherwise have.
(d) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless Xxxx-XxXxx, each of its directors, each of its officers who
signs the Xxxx-XxXxx Registration Statement, and each person who controls
Xxxx-XxXxx within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity in paragraph (a) from Xxxx-XxXxx to each
Underwriter, but only with reference to written information furnished to
Xxxx-XxXxx by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. Xxxx-XxXxx acknowledges that the statements
set forth in the [___ paragraph] of the cover page, in the [__ paragraph] of the
inside cover page and in the ___ paragraph under the heading ["Plan of
Distribution"] in any Preliminary Final Xxxx-XxXxx Prospectus or the Final
Xxxx-XxXxx Prospectus constitute the only information furnished in writing by or
on behalf of the several Underwriters for inclusion in the documents referred to
in the foregoing indemnity.
(e) Each Underwriter severally agrees to indemnify and hold harmless
Devon Energy and Xxxx-XxXxx, each of their respective directors, each of their
respective officers who signs the Devon Energy Registration Statement or the
Xxxx-XxXxx Registration Statement, respectively, and each person who controls
Devon Energy or Xxxx-XxXxx within the meaning of either the Act or the Exchange
Act, to the same extent as the foregoing indemnity in paragraph (c) from Devon
Energy to each Underwriter and Xxxx-XxXxx, but only with reference to written
34
information relating to such Underwriter furnished to Devon Energy or Xxxx-XxXxx
by or on behalf of such Underwriter through the Representatives specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. Devon Energy acknowledges that the statements set forth in
the [__] paragraph of the inside cover page and under the heading "Plan of
Distribution" in any Preliminary Devon Energy Prospectus or the Devon Energy
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in the documents referred to in the
foregoing indemnity.
(f) Promptly after receipt by an indemnified party under this Section
10 of notice of the commencement of any action, such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 10, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from any liability under paragraphs (a), (b), (c), (d) or (e) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a), (b), (c), (d) or (e)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, or (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action suit or proceeding.
(g) In the event that the indemnity provided in paragraph (a), (b),
(c), (d) or (e) of this Section 10 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, Xxxx-XxXxx, Xxxxx Energy and the
Underwriters agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
35
connection with investigating or defending same) (collectively "Losses") to
which Xxxx-XxXxx, Xxxxx Energy and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative benefits
received by Xxxx-XxXxx, Xxxxx Energy and the Underwriters from the offering of
the DECS; provided, however, that in no case shall any Underwriter (except as
may be provided in any agreement among underwriters relating to the offering of
the DECS) be responsible for any amount in excess of the underwriting discount
or commission applicable to the DECS purchased by such Underwriter hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, Xxxx-XxXxx, Xxxxx Energy and the Underwriters severally shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of Xxxx-XxXxx, Xxxxx Energy and
the Underwriters in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations. Benefits
received by Xxxx-XxXxx or Devon Energy on the one hand and the Underwriters on
the other with respect to such offering shall be deemed to be equal to the total
net proceeds from the offering (before deducting expenses) received by Xxxx-
XxXxx, and the total underwriting discounts and commissions, respectively, in
each case as set forth on the cover page of the Final Xxxx-XxXxx Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information provided by Xxxx-XxXxx
and Devon Energy on the one hand or the Underwriters on the other, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. Xxxx-XxXxx, Xxxxx
Energy and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (g), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 10, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
Xxxx-XxXxx or Devon Energy within the meaning of either the Act or the Exchange
Act, each officer of Xxxx-XxXxx or Devon Energy who shall have signed the
Registration Statement and each director of Xxxx-XxXxx or Devon Energy shall
have the same rights to contribution as Xxxx-XxXxx or Devon Energy, subject in
each case to the applicable terms and conditions of this paragraph (g).
(h) Notwithstanding the foregoing, all agreements between Xxxx-XxXxx
and Devon Energy in connection with the respective rights and the amount of
liability of each party to the other shall remain in full force and effect to
the extent provided therein.
11. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the DECS agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the principal amount of DECS
set forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of DECS set forth opposite the names of all the remaining
Underwriters) the DECS which the defaulting Underwriter or Underwriters agreed
but failed to purchase; provided, however, that in
36
the event that the aggregate principal amount of DECS which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of DECS set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the DECS, and if such nondefaulting Underwriters
do not purchase all the DECS, this Agreement will terminate without liability to
any nondefaulting Underwriter, Xxxx-XxXxx or Devon Energy. In the event of a
default by any Underwriter as set forth in this Section 11, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the Xxxx-
XxXxx or Devon Energy Registration Statement and the Final Xxxx-XxXxx or Devon
Energy Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to Xxxx-XxXxx, Xxxxx Energy and any nondefaulting
Underwriter for damages occasioned by its default hereunder.
12. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to Xxxx-XxXxx
and Devon Energy prior to delivery of and payment for the DECS, if prior to such
time (i) trading in Xxxx-XxXxx'x or Devon Energy's common stock shall have been
suspended by the Commission or trading in securities generally on the New York
Stock Exchange or the AMEX shall have been suspended or limited or minimum
prices shall have been established on either of such Exchanges, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency, or war,
or other calamity or crisis the effect of which on financial markets is such as
to make it, in the sole judgment of the Representatives, impracticable or
inadvisable to proceed with the offering or delivery of the DECS as contemplated
by the Final Xxxx-XxXxx Prospectus (exclusive of any supplement thereto).
13. Representations and Indemnities to Survive. Subject to the
limitations imposed by any applicable statute of limitations, the respective
agreements, representations, warranties, indemnities and other statements of
Xxxx-XxXxx and Devon Energy or their respective officers and of the Underwriters
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
Xxxx-XxXxx or Devon Energy or any of the officers, directors, employees, agents
or controlling persons referred to in Section 10 hereof, and will survive
delivery of and payment for the DECS. The provisions of Sections 9 and 10
hereof shall survive the termination or cancellation of this Agreement.
14. Other Agreement. Nothing herein shall alter the rights and
obligations of Xxxx-XxXxx and Devon Energy under the Registration Rights
Agreement, the terms of which shall survive and shall not be deemed to have been
terminated by any termination of this Underwriting Agreement or the consummation
of the offering of DECS contemplated hereby.
15. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Xxxxxxx Xxxxx Barney Inc. General Counsel (Fax
No.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx
Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General
Counsel; or if sent to Xxxx-XxXxx, will be mailed, delivered or
37
telefaxed to the Xxxx-XxXxx General Counsel (Fax No. (000) 000-0000) and
confirmed to it at the Xxxx-XxXxx Corporation, 000 Xxxxxx X. Xxxx Xxxxxx,
Xxxxxxxx Xxxx, Xxxxxxxx 00000, Attention: General Counsel; or if sent to Devon
Energy, will be mailed, delivered or telefaxed to ____________ and confirmed to
it at___________________________________________________, attention of the Legal
Department.
16. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 10 hereof, and no other person will have any right or obligation
hereunder.
17. Applicable Law. This agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
18. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
19. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
20. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Basic Xxxx-XxXxx Prospectus" shall mean the prospectus referred to in
paragraph (a) (i) of this Section 1 contained in the Xxxx-XxXxx
Registration Statement at the Xxxx-XxXxx Effective Date.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City [or ].
"Commission" shall mean the Securities and Exchange Commission.
"Devon Energy Effective Date" shall mean each date that the Devon
Energy Registration Statement and any post-effective amendment or
amendments thereto became or become effective.
"Devon Energy Prospectus" shall mean the prospectus relating to the
Shares that is first filed pursuant to Rule 424(b) after the Execution Time
or, if no filing pursuant to Rule 424(b) is required, shall mean the form
of final prospectus relating to the Shares included in the Devon Energy
Registration Statement at the Devon Energy Effective Date.
38
"Devon Energy Registration Statement" shall mean the registration
statement referred to in paragraph (a) of this Section 2 including
incorporated documents, exhibits and financial statements, as amended at
the Execution Time and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended. Such term shall include any Rule
430A Information deemed to be included therein at the Devon Energy
Effective Date as provided by Rule 430A.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Xxxx-XxXxx Prospectus" shall mean the prospectus supplement
relating to the DECS that is first filed pursuant to Rule 424(b) after the
Execution Time together with the Basic Xxxx-XxXxx Prospectus.
"Xxxx-XxXxx Effective Date" shall mean each date that the Xxxx-XxXxx
Registration Statement and any post-effective amendment or amendments
thereto became or become effective.
"Xxxx-XxXxx Registration Statement" shall mean the registration
statement referred to in paragraph (a) (i) of this Section 1, including
incorporated documents, exhibits and financial statements, as amended at
the Execution Time and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date shall also mean such
registration statement as so amended. Such term shall include any Rule
430A Information deemed to be included therein at the Xxxx-XxXxx Effective
Date as provided by Rule 430A.
"Preliminary Devon Energy Prospectus" shall mean any preliminary
prospectus referred to in paragraph (a) of this Section 2 and any
preliminary prospectus included in the Devon Energy Registration Statement
at the Devon Energy Effective Date that omits Rule 430A Information.
"Preliminary Final Xxxx-XxXxx Prospectus" shall mean any preliminary
prospectus supplement to the Basic Xxxx-XxXxx Prospectus which describes
the DECS and the offering thereof, is used prior to filing the Final Xxxx-
XxXxx Prospectus and is filed, together with the Basic Xxxx-XxXxx
Prospectus, pursuant to Rule 424(b).
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in paragraph 1(a) above and any preliminary prospectus included
in the Registration Statement at the Effective Date that omits Rule 430A
Information.
39
"Prospectus" shall mean the prospectus relating to the Securities that
is first filed pursuant to Rule 424(b) after the Execution Time or, if no
filing pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities included in the Registration
Statement at the Effective Date.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any Rule 430A
Information deemed to be included therein at the Effective Date as provided
by Rule 430A.
"Rule 424," "Rule 430A" and "Regulation S-K" refer to such rules or
regulation under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
Any reference herein to the Xxxx-XxXxx Registration Statement, the
Basic Xxxx-XxXxx Prospectus, any Preliminary Final Xxxx-XxXxx Prospectus or the
Final Xxxx-XxXxx Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Xxxx-XxXxx Effective
Date or the issue date of the Basic Xxxx-XxXxx Prospectus, any Preliminary Final
Xxxx-XxXxx Prospectus or the Final Xxxx-XxXxx Prospectus, as the case may be;
and any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Xxxx-XxXxx Registration Statement, the Basic Xxxx-XxXxx
Prospectus, any Preliminary Final Xxxx-XxXxx Prospectus or the Final Xxxx-XxXxx
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the Xxxx-XxXxx Effective Date, or the issue date of
any Preliminary Final Xxxx-XxXxx Prospectus or the Final Xxxx-XxXxx Prospectus,
as the case may be, deemed to be incorporated therein by reference.
40
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among Xxxx-
XxXxx, Xxxxx Energy and the several Underwriters.
Very truly yours,
Xxxx-XxXxx Corporation
By: ____________________________
Name:
Title:
Devon Energy Corporation
By:_____________________________
Name:
Title:
Devon Delaware Corporation
By:_____________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Xxxxxxx Xxxxx Barney
Credit Suisse First Boston Corporation
Xxxxxx Brothers Inc.
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx
ABN AMRO Incorporated
By: Xxxxxxx Xxxxx Barney Inc.
By: ___________________________
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
41
SCHEDULE I
Amount of
Underwritten DECS
Underwriter to be Purchased
----------- -------------------------
Xxxxxxx Xxxxx Xxxxxx Inc.......................................
Credit Suisse First Boston Corporation.........................
Xxxxxx Brothers Inc............................................
Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated..................................................
ABN AMRO Incorporated..........................................
-------------
Total................................................
=============
ANNEX A
Xxxx-XxXxx Significant Subsidiaries
-----------------------------------
ANNEX B
Devon Energy Significant Subsidiaries
-------------------------------------
