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EXHIBIT 1.1
150,000,000 SHARES
CONOCO INC.
CLASS A COMMON STOCK ($.01 PAR VALUE)
UNDERWRITING AGREEMENT
October__, 1998
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October __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxxxxx, Sachs & Co.
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxx Xxxxxx Inc.
BT Alex. Xxxxx Incorporated
Xxxxxxxx & Co. Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxxx Sachs International
Xxxxxxx Xxxxx International Limited
X.X. Xxxxxx Securities Ltd.
Xxxxx Xxxxxx Inc.
BT Alex. Xxxxx International, a division of Bankers Trust International, PLC
J. Xxxxx Xxxxxxxx & Co. Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Conoco Inc., a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters (as defined below) 150,000,000
shares of its Class A Common Stock ($.01 par value) (the "FIRM SHARES").
It is understood that, subject to the conditions hereinafter
stated, 135,000,000 Firm Shares (the "U.S. FIRM SHARES") will be sold to the
several U.S. Underwriters named in Schedule I hereto (the "U.S. UNDERWRITERS")
in connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian Persons (as such terms are
defined in the Agreement Between U.S. and International Underwriters of even
date herewith), and 15,000,000 Firm Shares (the "INTERNATIONAL SHARES") will be
sold to the several International Underwriters named in Schedule II hereto (the
"INTERNATIONAL UNDERWRITERS") in connection with the offering and sale of such
International Shares outside the United States and Canada to persons other than
United States and Canadian Persons. Xxxxxx Xxxxxxx & Co. Incorporated, Credit
Suisse First Boston Corporation, Xxxxxxx, Sachs & Co., Merrill, Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated, X.X. Xxxxxx Securities Inc., Xxxxx Xxxxxx Inc., BT
Alex. Xxxxx Incorporated and Xxxxxxxx & Co.
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Inc. shall act as representatives (the "U.S. REPRESENTATIVES") of the several
U.S. Underwriters, and Xxxxxx Xxxxxxx & Co. International Limited, Credit
Suisse First Boston (Europe) Limited, Xxxxxxx Sachs International, Xxxxxxx
Xxxxx International Limited, X.X. Xxxxxx Securities Ltd., Xxxxx Xxxxxx Inc., BT
Alex. Xxxxx International, a division of Bankers Trust International, PLC and
J. Xxxxx Xxxxxxxx & Co. Limited shall act as representatives (the
"INTERNATIONAL REPRESENTATIVES") of the several International Underwriters.
The U.S. Underwriters and the International Underwriters are hereinafter
collectively referred to as the Underwriters.
[The Company] [DuPont Energy Company ("DEC")] also proposes to
issue and sell to the several U.S. Underwriters not more than an additional
22,500,000 shares of the Company's Class A Common Stock ($.01 par value) (the
"ADDITIONAL SHARES") if and to the extent that the U.S. Representatives shall
have determined to exercise, on behalf of the U.S. Underwriters, the right to
purchase such shares of common stock granted to the U.S. Underwriters in
Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "SHARES". The shares of Class A Common Stock
($.01 par value) of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "COMMON STOCK".
The Company has filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement relating to the Shares.
The registration statement contains two prospectuses to be used in connection
with the offering and sale of the Shares: the U.S. prospectus, to be used in
connection with the offering and sale of Shares in the United States and Canada
to United States and Canadian Persons, and the international prospectus, to be
used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons.
The international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter
referred to as the "REGISTRATION STATEMENT"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "PROSPECTUS". If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
In connection with the offering of the Shares contemplated
hereby, the Company, [DuPont Energy Company ("]DEC[") , the sole shareholder of
the Company] E.I. du Pont de Nemours and Company ("DUPONT"), and certain
subsidiaries of the foregoing entities have entered into a series of
transactions described in the Prospectus under the captions "Prospectus
Summary-Separation From DuPont" and "Arrangements Between the Company and
DuPont". Such transactions are herein collectively referred to as the
"REALIGNMENT."
1.[1] Representations and Warranties of the Company. The
Company represents and warrants to and agrees with each of the Underwriters
that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or, to
the knowledge of the Company, threatened by the Commission.
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(b) (i) The Registration Statement, when it became
effective, did not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the
Registration Statement and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with
the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the representations and warranties set forth in this paragraph do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole.
(d) (i) Each Material Subsidiary of the Company has been
duly incorporated or organized, is validly existing as a corporation
or partnership in good standing under the laws of the jurisdiction of
its incorporation, has the corporate or partnership power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of
the issued shares of capital stock of each Material Subsidiary of the
Company have been duly and validly authorized and issued, are fully
paid and non-assessable; all of the issued shares of capital stock of
each Material Subsidiary and all partnership interests in any Material
Subsidiary, where applicable, are owned directly by the Company, free
and clear of all liens, encumbrances, equities or claims, except as
provided on Schedule III attached hereto. Material Subsidiaries are
those subsidiaries listed on Schedule III.
(ii) There are no subsidiaries of the Company which had
net book value, as of December 31, 1997, in excess of $200 million
other than those listed on Schedule III attached hereto.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
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(f) The authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus.
(g) The shares of Common Stock and Class B Common Stock ($.01
par value) of the Company (the "CLASS B COMMON STOCK" and, together
with the Common Stock, the "CAPITAL STOCK") outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of
such Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any material provisions
of an agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any
subsidiary, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under this
Agreement, except such as may be required by the securities or Blue
Sky laws of the various states in connection with the offer and sale
of the Shares.
(j) There has not occurred any material adverse change, or
any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending
or, to the knowledge of the Company, threatened to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject that
are required to be described in the Registration Statement or the
Prospectus and are not so described or any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not described or filed as
required.
(l) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities
Act and the applicable rules and regulations of the Commission
thereunder.
(m) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
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(n) The Company and its subsidiaries (i) are 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 all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals or failure to comply with the terms and conditions of
such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(o) There are no contracts, agreements or understandings
between the Company and any person, other than DuPont, granting such
person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of
the Company or to require the Company to include such securities with
the Shares registered pursuant to the Registration Statement.
(p) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(1) the Company and its subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (2) the
Company has not purchased any of its outstanding capital stock, nor
declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends;
and (3) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its subsidiaries,
except in each case as described in the Prospectus.
(q) The Company and its subsidiaries own or possess, or can
acquire on reasonable terms, all material patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets
and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business
now operated by them and neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on
the Company and its subsidiaries, taken as a whole.
(r) No material labor dispute with the employees of the
Company or any of its subsidiaries exists, except as described in the
Prospectus, or, to the knowledge of the Company, is imminent; and the
Company is not aware of any existing, threatened or imminent labor
disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could have a material adverse effect
on the Company and its subsidiaries, taken as a whole.
(s) The Company and its subsidiaries possess all
certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct
their respective businesses except where failure to possess such
certificates, authorizations and permits would not, singly or in the
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aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole, and neither the Company nor any of its
subsidiaries 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 Company and its subsidiaries, taken as a whole, except
as described in the Prospectus.
(t) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (1) transactions are executed in accordance
with management's general or specific authorizations; (2) transactions
are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles
and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets compared
with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
[1.2. Representations and Warranties of DEC. DEC represents
and warrants to and agrees with each of the underwriters that:
(a) it is the lawful owner of the Additional Shares to be
sold by it hereunder and upon sale and delivery of, and payment for,
such Additional Shares, as provided herein, DEC will convey to the
Underwriters good and marketable title to such Additional Shares, free
and clear of all liens, encumbrances, equities and claims whatsoever.
(b) DEC has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of
its incorporation.
(c) This Agreement has been duly authorized, executed and
delivered by DEC.
(d) it has not taken, 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 the
Company to facilitate the sale or resale of the Shares.
(e) The execution and delivery by DEC of, and the performance
by DEC of its obligations under, this Agreement will not contravene
any provision of applicable law or the certificate of incorporation or
by-laws of DEC or any material provisions of an agreement or other
instrument binding upon DEC or any of its subsidiaries that is
material to DEC and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over DEC or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by DEC of
its obligations under this Agreement, except such as may be required
by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Shares.
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Any certificate signed by any officer of DEC and delivered
pursuant to this agreement to the Representatives or counsel for the
Underwriters in connection with the offering of the Shares shall be deemed a
representation and warranty by DEC, as to matters covered thereby, to each
Underwriter.]
2. Agreements to Sell and Purchase. The Company hereby
agrees to sell to the several Underwriters, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective numbers of Firm Shares set forth in
Schedules I and II hereto opposite its names at U.S.$_____ a share ("PURCHASE
PRICE").
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, [the Company][DEC]
agrees to sell to the U.S. Underwriters the Additional Shares, and the U.S.
Underwriters shall have a one-time right to purchase, severally and not
jointly, up to 22,500,000 Additional Shares at the Purchase Price. If the
U.S. Representatives, on behalf of the U.S. Underwriters, elect to exercise
such option, the U.S. Representatives shall so notify [the Company][DEC] in
writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the U.S.
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each U.S.
Underwriter agrees, severally and not jointly, to purchase the number of
Additional Shares (subject to such adjustments to eliminate fractional shares
as the U.S. Representatives may determine) that bears the same proportion to
the total number of Additional Shares to be purchased as the number of U.S.
Firm Shares set forth in Schedule I hereto opposite the name of such U.S.
Underwriter bears to the total number of U.S. Firm Shares.
Each of (i) the Company and (ii) DuPont and any of its
affiliates hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period ending 180 days after the date of the Prospectus, (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (ii) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise, except in connection with
the split-off described in the Prospectus under "Prospectus Summary -
Separation from DuPont". The foregoing sentence shall not apply to (A) the
Shares to be sold hereunder or (B) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion or
issuance upon cancellation of a security outstanding on the date hereof of
which the Underwriters have been advised in writing or (c) transactions by any
other person other than the Company and DuPont relating to shares of Common
Stock or other securities acquired in open market transactions after the
completion of the Offerings. The restrictions on the Company are subject to
exceptions for the issuance of Company Stock Options and Common Stock pursuant
to existing employee benefit plans.
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3. Terms of Public Offering. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
is further advised by you that the Shares are to be offered to the public
initially at U.S.$_____ a share (the "PUBLIC OFFERING PRICE") and to certain
dealers selected by you at a price that represents a concession not in excess
of U.S.$____ a share under the Public Offering Price, and that any Underwriter
may allow, and such dealers may reallow, a concession, not in excess of
U.S.$____ a share, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall
be made to the Company in Federal or other funds immediately available in New
York City against delivery of such Firm Shares for the respective accounts of
the several Underwriters at the office of Cravath, Swaine & Xxxxx, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx at 10:00 a.m., New York City time, on October ___,
1998, or at such other time on the same or such other date, not later than
_________, 1998, as shall be designated in writing by you. The time and date
of such payment are hereinafter referred to as the "CLOSING DATE".
Payment for any Additional Shares shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at the office of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx at 10:00 a.m., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such
other date, in any event not later than _______, 1998, as shall be designated
in writing by the U.S. Representatives. The time and date of such payment are
hereinafter referred to as the "OPTION CLOSING DATE".
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Shares to the Underwriters duly
paid, against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The
obligations of the Company to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 5:00 p.m. (New York City time) on
the date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Date, there shall not have occurred
any change, or any development involving a prospective change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in
your judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
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(b) The Underwriters shall have received on the Closing Date
a certificate, dated the Closing Date and signed by an executive
officer of the Company, to the effect set forth in Section 5(a)
above and to the effect that the representations and warranties of the
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP outside counsel
for the Company and DuPont, dated the Closing Date, to the effect
that:
(i) [each of] the Company [and DEC] has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the Delaware[,][. The Company] has
the corporate power and authority to own its property and to
conduct its business as described in the Prospectus;
(ii) the Shares have been duly authorized and, when
issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Shares will not be
subject to any preemptive or similar rights arising under the
restated certificate of incorporation (the "certificate of
incorporation") or by-laws of the Company;
(iii) this Agreement has been duly authorized,
executed and delivered by the Company[, DEC] and DuPont;
(iv) the execution and delivery by the Company [and
DEC] of this Agreement, and the consummation of the
transactions contemplated herein, will not contravene any
provision of (a) the certificate of incorporation or by-laws
of the Company [or DEC] or (b) the General Corporation Law of
the State of Delaware, the laws of the State of New York or
the laws of the United States of America which, in each
instance, in such counsel's experience are normally applicable
to transactions of the type contemplated by the Agreement.
(v) No authorization, approval, consent or order of
any court or governmental authority or agency is required
under the General Corporation Law of the State of Delaware,
the laws of the State of New York or the laws of the United
States of America in connection with the transactions
contemplated by this Agreement (except such as may be required
under the Securities Act or the regulations thereunder or
state securities laws or by the rules and regulations of the
NASD), except that such counsel need not express any opinion
as to laws other than those that, in such counsel's
experience, are normally applicable to transactions of the
type contemplated by this Agreement.
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(vi) the statements in the Prospectus under the
captions "Arrangements Between the Company and
DuPont--Restructuring, Transfer and Separation Agreement",
"Arrangements Between the Company and DuPont--Tax Sharing
Agreement", "Arrangements Between the Company and
DuPont--Employee Matters Agreement", "Arrangements Between the
Company and DuPont--Registration Rights Agreement",
"Description of Capital Stock" and "Material United States
Federal Tax Considerations for Non-U.S. Holders of Class A
Common Stock", in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(vii) the Company is not and, after giving effect
to the offering and sale of the Shares and the application of
the proceeds thereof as described in the Prospectus, will not
be an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended; and
(viii) such counsel is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical
data included therein as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
Such opinion will also contain a statement that in connection
with the preparation of the Registration Statement and the
Prospectuses, such counsel participated in conferences with officers
and representatives of the Company, counsel for the Company,
representatives of the independent accountants of the Company and the
Underwriters at which the contents of the Registration Statement were
discussed and, although they are not passing upon, and do not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectuses
(other than those referenced in paragraph (vi) above) and have made no
independent check or verification thereof, on the basis of the
foregoing, no facts have come to their attention that have led them to
believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectuses,
as of their dates and as of the date of such opinion, contained an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
that they express no opinion or belief with respect to the financial
statements, schedule or other financial and statistical data included
therein or excluded therefrom.
(d) The Underwriters shall have received on the Closing Date
an opinion of Xxxx X. Xxxxxxxxxx, Esq., general counsel for the
Company, dated the Closing Date, to the effect that:
(i) The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to
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the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, taken as whole;
(ii) each Material Subsidiary of the Company has
been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the shares of Common Stock outstanding prior
to the issuance of the Shares have been duly authorized and
are validly issued, fully paid and non-assessable;
(iv) all of the issued and outstanding shares of
capital stock of each Material Subsidiary of the Company have
been duly authorized and validly issued, are fully paid and
non-assessable; all of the issued shares of capital stock of
each Material Subsidiary and all partnership interest in any
Material Subsidiary, where applicable, are owned directly or
indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims, except as set forth on
Schedule III hereto;
(v) the execution and delivery by the Company of,
and the performance by the Company of its obligations under,
this Agreement will not contravene any provision of (a) the
laws of the State of Texas or the laws of the United States of
America which, in each instance, in such counsel's experience,
are normally applicable to transactions of the type
contemplated by this Agreement or (b) to such counsel's
knowledge, any material provision of any agreement or other
instrument binding upon the Company or any of its subsidiaries
that is material to the Company and its subsidiaries, taken as
a whole, or, to such counsel's knowledge, any judgment, order
or decree of any governmental body, agency or court of the
United States or Texas having jurisdiction over the Company or
any subsidiary;
(vi) No authorization, approval, consent or order of
any court or governmental authority or agency is required
under the laws of the United States of America in connection
with the transactions contemplated by this Agreement (except
such as may be required under the Securities Act or the
regulations thereunder or state securities laws or by the
rules and regulations of the NASD), except that such counsel
need not express any opinion as to laws other than those that,
in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement;
(vii) the statements (A) in the Prospectus under
the captions "Business--Environmental Regulation",
"Business--Litigation and Other Contingencies",
"Management--Treatment of Outstanding Stock Options
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13
and Stock Appreciation Rights -- Option Program",
"Management--1998 Stock and Performance Incentive Plan of the
Company", "Management--1998 Key Employee Stock Performance
Plan", "Management--Deferred Compensation Plan for Nonemployee
Directors", "Management--Employment Agreements", "Arrangements
Between the Company and DuPont" (excluding "Arrangements
Between Company and DuPont--Restructuring, Transfer and
Separation Agreement", "Arrangements Between the Company and
DuPont--Tax Sharing Agreement", "Arrangements Between the
Company and DuPont--Employee Matters Agreement" and
"Arrangements Between the Company and DuPont--Registration
Rights Agreement"), "Shares Eligible for Future Sale" and
"Management--Directors and Officers Indemnification and
Insurance" and (B) in the Registration Statement in Items 14
and 15, in each case insofar as such statements constitute
summaries of the legal matters, documents or proceedings
referred to therein, accurately present the information called
for with respect to such legal matters, documents and
proceedings and accurately summarize the matters referred to
therein;
(viii) after due inquiry, such counsel does not know
of any legal or governmental proceedings pending or threatened
to which the Company or any of its subsidiaries is a party or
to which any of the properties of the Company or any of its
subsidiaries is subject that, in such counsel's judgment, are
required to be described in the Registration Statement or the
Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to
be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that
are not described or filed as required;
(ix) the Company and its subsidiaries (A) are in
compliance with any and all applicable Environmental Laws, (B)
have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to
conduct their respective businesses and (C) are in compliance
with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and
(x) except as described in the Prospectus under the
captions "Prospectus Summary--Separation from DuPont" and
"Arrangements Between the Company and DuPont", as a result of
the Realignment, all businesses or operations previously owned
by DuPont or any of its subsidiaries relating primarily to the
businesses of the Company are owned, directly or indirectly,
through one or more subsidiaries, by the Company except (i)
where the failure of the Company to own such business or
operations would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole and (ii) the
Delayed Companies (as such term is defined in the Separation
Agreement referred to in the Prospectus).
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14
Such opinion will also contain a statement that in connection
with the preparation of the Registration Statement and the
Prospectuses, such counsel participated in conferences with officers
and representatives of the Company, counsel for the Company,
representatives of the independent accountants of the Company and the
Underwriters at which the contents of the Registration Statement were
discussed and, although he is not passing upon, and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectuses
(other than those referenced in paragraph (vii) above) and has made no
independent check or verification thereof, on the basis of the
foregoing, no facts have come to his attention that have led him to
believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectuses,
as of their dates and as of the date of such opinion, contained an
untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
that he expresses no opinion or belief with respect to the financial
statements (including the notes thereto and the auditor's reports
thereon), schedules or other financial and statistical data included
therein or excluded therefrom.
(e) The Underwriters shall have received on the Closing Date
an opinion of Cravath, Swaine & Xxxxx, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in Sections
5(c)(ii), 5(c)(iii), 5(c)(vi) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters")
and 5(c)(ix) above as well as the statement contained in the last
paragraph of Section 5(c) above.
The opinions of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP and
Xxxx X. Xxxxxxxxxx, Esq. described in Sections 5(c) and (d) above
shall be rendered to the Underwriters at the request of the Company
and shall so state therein.
(f) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory
to the Underwriters and PricewaterhouseCoopers LLP, from
PricewaterhouseCoopers LLP, independent accountants, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in
the Registration Statement and the Prospectus; provided that the
letter delivered on the Closing Date shall use a "cut-off date" not
earlier than the date hereof.
(g) The "lock-up" agreements, each substantially in the
form of Exhibit A hereto, between you and certain officers of the
Company relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to you on or
before the date hereof, shall be in full force and effect on the
Closing Date.
(h) The several obligations of the U.S. Underwriters to
purchase Additional Shares hereunder are subject to the delivery to
the U.S. Representatives on the Option Closing Date of such documents
as they may reasonably request with respect to the good standing of
the Company, the due authorization and issuance of the Additional
Shares and other matters related to the issuance of the Additional
Shares.
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15
(i) The Shares shall have received approval for listing on
the New York Stock Exchange.
6. Covenants of the Company and DuPont. In further
consideration of the agreements of the Underwriters herein contained, the
Company and, with respect to paragraph (f) below, DuPont, covenant with each
Underwriter as follows:
(a) To furnish to you, without charge, 15 signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the
Registration Statement (without exhibits thereto) and to furnish to
you in New York City, without charge, prior to 10:00 a.m. New York
City time on the business day next succeeding the date of this
Agreement and during the period mentioned in Section 6(c) below, as
many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably
request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the
Company) to which Shares may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, either amendments
or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law.
(d) To endeavor to qualify the Shares for offer and sale
under the securities or Blue Sky laws of such U.S. jurisdictions as
you shall reasonably request.
(e) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement
covering the twelve-month period ending December 31, 1999 that
satisfies the provisions of Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder.
(f) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of the
Company's and DuPont's obligations under this Agreement, including:
(i) the fees, disbursements and expenses of the
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Company's and DuPont's counsel and the Company's accountants in
connection with the registration and delivery of the Shares under the
Securities Act and all other fees or expenses in connection with the
preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and
the mailing and delivering of copies thereof to the Underwriters and
dealers, in the quantities hereinabove specified, (ii) all costs and
expenses related to the transfer and delivery of the Shares to the
Underwriters, including any transfer or other taxes payable thereon,
(iii) the cost of printing or producing any Blue Sky or Legal
Investment memorandum in connection with the offer and sale of the
Shares under state securities laws and all expenses in connection with
the qualification of the Shares for offer and sale under state
securities laws as provided in Section 6(d) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection
with the Blue Sky or Legal Investment memorandum, (iv) all filing fees
and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification
of the offering of the Shares by the National Association of
Securities Dealers, Inc., (v) all fees and expenses in connection with
the preparation and filing of the registration statement on Form 8-A
relating to the Common Stock and all costs and expenses incident to
listing the Shares on the New York Stock Exchange and other national
securities exchanges and foreign stock exchanges, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and
charges of any transfer agent, registrar or depositary, (viii) the
costs and expenses of the Company and DuPont relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without
limitation, expenses associated with the production of road show
slides and graphics, fees and expenses of any consultants engaged in
connection with the road show presentations with the prior approval of
the Company, travel and lodging expenses of the representatives and
officers of the Company and DuPont and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and
(ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not
otherwise made in this Section. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the
Underwriters will pay all of their costs and expenses, including fees
and disbursements of their counsel, stock transfer taxes payable on
resale of any of the Shares by them and any advertising expenses
connected with any offers they may make.
7. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission
15
17
or alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any preliminary prospectus or the Prospectus shall
not inure to the benefit of any Underwriter from whom the person asserting any
such losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement, and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus,
the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a), or 7(b), such person (the
"INDEMNIFIED PARTY") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be
at the expense of such indemnified party unless (i) the indemnifying party and
the indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Xxxxxx Xxxxxxx
& Co. Incorporated, in the case of parties indemnified pursuant to Section
7(a), and by the Company, in the case of parties indemnified pursuant to
Section 7(b). The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such proceeding.
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18
(d) To the extent the indemnification provided for in Section
7(a) or 7(b) is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided
by clause 7(d)(i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause 7(d)(i) above but also the relative fault of the Company on the one hand
and of the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate Public
Offering Price of the Shares. The relative fault of the Company on the one
hand and the Underwriters on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares they have purchased hereunder, and not
joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 7(d). The amount paid
or payable by an indemnified party as a result of the losses, claims, damages
and liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
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(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter or by or on behalf of the Company, its officers or directors or
any person controlling the Company and (iii) acceptance of and payment for any
of the Shares.
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the execution
and delivery of this Agreement and prior to the Closing Date (i) trading
generally shall have been suspended or materially limited on or by, as the case
may be, any of the New York Stock Exchange, the American Stock Exchange, the
National Association of Securities Dealers, Inc., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and (b) in
the case of any of the events specified in clauses 8(a)(i) through 8(a)(iv),
such event, singly or together with any other such event, makes it, in your
judgment, impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
If, on the Closing Date or the Option Closing Date, as the
case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate number of the Shares to be purchased on such date,
the other Underwriters shall be obligated severally in the proportions that the
number of Firm Shares set forth opposite their respective names in Schedule I
or Schedule II bears to the aggregate number of Firm Shares set forth opposite
the names of all such non-defaulting Underwriters, or in such other proportions
as you may specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or
the Company. In any such case either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. If,
on the Option Closing Date, any Underwriter or Underwriters shall fail or
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase
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Additional Shares or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or
more counterparts, each of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
CONOCO INC.
By:
--------------------------
Name:
Title:
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(With respect to the third paragraph of
Section 2 hereof)
E.I. DU PONT DE NEMOURS AND COMPANY
By:
-------------------------------------
Name:
Title:
[DUPONT ENERGY COMPANY
By:
-------------------------------------
Name:
Title:]
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX, SACHS & CO.
MERRILL, LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED
X.X. XXXXXX SECURITIES INC.
XXXXX XXXXXX INC.
BT ALEX. XXXXX INCORPORATED
XXXXXXXX & CO. INC.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
---------------------------------
Name:
Title:
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XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXXX SACHS INTERNATIONAL
XXXXXXX XXXXX INTERNATIONAL LIMITED
X.X. XXXXXX SECURITIES LTD.
XXXXX XXXXXX INC.
BT ALEX. XXXXX INTERNATIONAL, A DIVISION OF BANKERS TRUST
INTERNATIONAL, PLC
J. XXXXX XXXXXXXX & CO. LIMITED
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By:
-----------------------------
Name:
Title:
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SCHEDULE I
U.S. UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxxxxx, Sachs & Co.
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxx Xxxxxx Inc.
BT Alex. Xxxxx Incorporated
Xxxxxxxx & Co. Inc.
[NAMES OF OTHER U.S. UNDERWRITERS]
---------------
Total U.S. Firm Shares .........................
===============
24
SCHEDULE II
INTERNATIONAL UNDERWRITERS
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
Xxxxxx Xxxxxxx & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxxx Sachs International
Xxxxxxx Xxxxx International Limited
X.X. Xxxxxx Securities Ltd.
Xxxxx Xxxxxx Inc.
BT Alex. Xxxxx International, a division
of Bankers Trust International, PLC
J. Xxxxx Xxxxxxxx & Co. Limited
[NAMES OF OTHER INTERNATIONAL UNDERWRITERS]
---------------
Total International Firm Shares...............
===============
25
SCHEDULE III
Material Subsidiaries
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Conoco Inc.
Norske Conoco A/S
Conoco Mineraloel GmbH
Conoco Limited
Conoco (U.K.) Limited
Conoco Oil & Gas Associates L.P.(1)
Conoco Asia Limited
Lobo Pipeline Company
Conoco Development Ltd.
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(1)Conoco and its affiliates own, directly or indirectly, a total of
approximately 78.5% of the partnership interests in Conoco Oil & Gas
Associates L.P.
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EXHIBIT A
[FORM OF LOCK-UP LETTER]
October __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
Credit Suisse First Boston Corporation
Xxxxxxx, Sachs & Co.
Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated
X.X. Xxxxxx Securities Inc.
Xxxxx Xxxxxx Inc.
BT Alex. Xxxxx Incorporated
Xxxxxxxx & Co. Inc.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxx & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxxx Sachs International
Xxxxxxx Xxxxx International Limited
X.X. Xxxxxx Securities Ltd.
Xxxxx Xxxxxx Inc.
BT Alex. Xxxxx International, a division of Bankers Trust International, PLC
J. Xxxxx Xxxxxxxx & Co. Limited
c/o Morgan Xxxxxxx & Co. International Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co.
Incorporated ("XXXXXX XXXXXXX") and Xxxxxx Xxxxxxx & Co. International Limited
("MSIL") propose to enter into an Underwriting Agreement (the "UNDERWRITING
AGREEMENT") with Conoco Inc., a Delaware corporation (the "COMPANY") and E.I.
du Pont de Nemours and Company, a Delaware corporation, providing for the
public offering (the "PUBLIC OFFERING") by the several Underwriters, including
Xxxxxx Xxxxxxx and MSIL (the "UNDERWRITERS") of 150,000,000 shares (the
"SHARES") of the Class A Common Stock, par value $.01 per share, of the Company
(the "COMMON STOCK").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Xxxxxx
Xxxxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 180 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly,
any shares of
27
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock, or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to
(a) the sale of any Shares to the Underwriters pursuant to the Underwriting
Agreement or (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Xxxxxx Xxxxxxx on behalf of the Underwriters, it will not,
during the period commencing on the date hereof and ending 180 days after the
date of the Prospectus, make any demand for or exercise any right with respect
to, the registration of any shares of Common Stock or any security convertible
into or exercisable or exchangeable for Common Stock.
It is agreed and understood that nothing in this agreement
shall prohibit the undersigned from: (1) exercising any stock option granted as
a direct or indirect result of any company program, including but not limited
to, any form of "cashless" exercise generally available for such grants,
provided that the net resulting shares from stock exercise are not sold during
the period of this agreement; (2) using any Company stock or stock options as
collateral for a loan provided that the holder of said collateral executes this
agreement or an agreement substantially similar in form; (3) gifting any
Company stock to family members or family trusts provided that such family
members or family trusts execute this agreement or an agreement substantially
similar in form. Xxxxxx Xxxxxxx further agrees that it will give good faith
consideration to any request for waiver of any or all of the requirements of
this agreement due to serious personal hardship.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public Offering will
only be made pursuant to an Underwriting Agreement, the terms of which are
subject to negotiation between the Company and the Underwriters.
Very truly yours,
----------------------------
(Name)
----------------------------
(Address)
2
