EXHIBIT 4.6
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
SECOND SUPPLEMENTAL INDENTURE
among
Devon Energy Corporation
Devon Energy Corporation (Oklahoma)
and
The Bank of New York
as Trustee
Dated as of August 17, 1999
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
SECOND SUPPLEMENTAL INDENTURE, dated as of August __, 1999 (the "Second
Supplemental Indenture"), among Devon Energy Corporation (formerly Devon
Delaware Corporation), a Delaware corporation (the "New Devon Guarantor"), Devon
Energy Corporation (Oklahoma) (formerly Devon Energy Corporation), an Oklahoma
corporation and a wholly-owned subsidiary of New Devon Guarantor (the
"Company"), and The Bank of New York, as trustee (the "Trustee") under the
Indenture dated as of July 3, 1996 between the Company and the Trustee (the
"Base Indenture") and the First Supplemental Indenture dated as of July 3, 1996
between the Company and the Trustee (the "First Supplemental Indenture" and
together with the Base Indenture and the Second Supplemental Indenture, the
"Indenture").
WITNESSETH
WHEREAS, the Company and the Trustee have heretofore executed the Base
Indenture and the First Supplemental Indenture providing for the issuance of 6
1/2% Convertible Junior Subordinated Debentures (the "Convertible Debentures"),
the form and substance of such Convertible Debentures and the terms, provisions
and conditions thereof set forth as provided in the Base Indenture and the First
Supplemental Indenture;
WHEREAS, Devon Financing Trust, a Delaware statutory business trust (the
"Trust"), in July 1996 sold to Xxxxxx Xxxxxxx & Co. Incorporated (the "Initial
Purchaser") in a private placement, $149,500,000 of 6 1/2% Trust Convertible
Preferred Securities (the "Convertible Preferred Securities"), representing
undivided beneficial interests in the assets of the Trust and invested the
proceeds from such sale, together with the proceeds of the issuance and sale by
the Trust to the Company of $4,623,750 aggregate liquidation amount of its
Common Securities, in $154,123,750 aggregate principal amount of the Convertible
Debentures;
WHEREAS, the Company has heretofore executed and delivered a Preferred
Securities Guarantee Agreement and a Common Securities Guarantee Agreement, each
dated as of July 3, 1996 (collectively, the "Trust Securities Guarantees"),
pursuant to which the Company guaranteed certain obligations of the Trust;
WHEREAS, as a result of the merger of PennzEnergy Company with and into New
Devon Guarantor and the merger of Devon Oklahoma Corporation, an Oklahoma
corporation, with and into the Company (collectively, the "Merger"), the
2
Company has continued to survive as a direct wholly owned subsidiary of New
Devon Guarantor, and each share of the common stock of the Company was converted
into the right to receive one share of New Devon Guarantor's common stock;
WHEREAS, pursuant to Section 6.4 of the First Supplemental Indenture, the
Merger constituted a Common Stock Fundamental Change (as defined in the First
Supplemental Indenture);
WHEREAS, Section 14.9 of the Base Indenture requires that the Company and
New Devon Guarantor, as a result of the Merger, execute a supplemental indenture
pursuant to which holders of the Convertible Debentures shall have the right to
convert such Convertible Debentures into the kind and amount of shares of common
stock of New Devon Guarantor receivable in the Merger by a holder of such number
of shares of common stock of the Company into which such Convertible Debentures
might have been converted immediately prior to the Merger;
WHEREAS, the New Devon Guarantor is willing to guarantee on a subordinated
basis as set forth more fully herein, among other things, the payment of the
principal of, premium, if any, and interest on the Convertible Debentures in
order to preserve the exemption available under Section 3(a)(9) of the
Securities Act of 1933, as amended (the "Securities Act") for the conversion of
Convertible Debentures into common stock of the New Devon Guarantor;
WHEREAS, Section 8.1 of the Base Indenture and Section 6.4 of the First
Supplemental Indenture permit the Company to merge with another corporation
provided certain conditions are satisfied;
WHEREAS, pursuant to Sections 9.1(h) and 9.1(i) of the Base Indenture, the
Company, New Devon Guarantor and the Trustee may enter into this Second
Supplemental Indenture without consent of the holders of the Convertible
Debentures; and
WHEREAS, the Company has requested that the Trustee execute and deliver
this Second Supplemental Indenture, and all requirements necessary to make this
Second Supplemental Indenture a valid instrument in accordance with its terms
have been performed.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
3
Company, New Devon Guarantor and the Trustee mutually covenant and agree for the
equal and ratable benefit of the holders of the Convertible Debentures as
follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Definition of Terms.
(a) Capitalized terms used herein without definition shall have
the meaning assigned to them in the Indenture.
(b) The definition of "Common Stock" set forth in Section 1.1 of
the Base Indenture is hereby amended by deleting all references therein to "the
Company" and inserting in lieu thereof "the New Devon Guarantor," and Section
1.1(h) of the First Supplemental Indenture is hereby amended by deleting "(iii)
Common Stock" and inserting in lieu thereof "(iii) [reserved]."
(c) The definition of "Common Stock Fundamental Change" set forth
in Section 1.1 of the First Supplemental Indenture is hereby amended by deleting
all references therein to "the Company" and inserting in lieu thereof "the New
Devon Guarantor."
(d) Section 1.1 of the First Supplemental Indenture is hereby
amended to add the following definitions:
"New Devon Guarantor" means Devon Energy Corporation (formerly Devon
Delaware Corporation), a Delaware corporation, and shall include its successors
and assigns.
"Guarantor Senior Indebtedness " means, with respect to the New Devon
Guarantor, (i) the principal, premium, if any, and interest in respect of (a)
indebtedness of the New Devon Guarantor for money borrowed under any credit
agreements, notes, guarantees or similar documents and (b) indebtedness
evidenced by securities, debentures, bonds or other similar instruments issued
by the New Devon Guarantor; (ii) all capital lease obligations of the New Devon
Guarantor; (iii) all obligations of the New Devon Guarantor issued or assumed as
the deferred purchase price of property, all conditional sale obligations of the
New Devon
4
Guarantor issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the New Devon Guarantor and all obligations of
the New Devon Guarantor under any title retention agreement (but excluding trade
accounts payable arising in the ordinary course of business); (iv) all
obligations of the New Devon Guarantor for the reimbursement on any letter of
credit, banker's acceptance, security purchase facility or similar credit
transaction; (v) all obligations of the New Devon Guarantor (contingent or
otherwise) with respect to interest rate or other swap, cap or collar
agreements, oil or gas commodity hedge transactions or other similar instruments
or agreements or foreign currency hedge, exchange, purchase or similar
instruments or agreements; (vi) all obligations of the types referred to in
clauses (i) through (v) of other Persons for the payment of which the New Devon
Guarantor is responsible or liable as obligor, guarantor or otherwise; and (vii)
all obligations of the types referred to in clauses (i) through (vi) of other
Persons secured by lien on any property or asset of the New Devon Guarantor
(whether or not such obligation is assumed by the New Devon Guarantor), whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the New Devon Guarantor, except
for (A) any such indebtedness that is by its terms subordinated to or pari passu
with the New Devon Guaranty, and (B) any indebtedness between or among the New
Devon Guarantor or its Affiliates.
"New Devon Guaranty" means the guarantee of the Guarantor pursuant to
Section 16.1 hereof.
Section 1.2 Section 5.1 of the Base Indenture is hereby amended by
deleting subsection (h) thereof and adding the following new subsections:
(h) the entry by a court having jurisdiction in the premises of
decree or order for relief in respect of the New Devon Guarantor in an
involuntary case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the New Devon Guarantor or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days;
(i) the commencement by the New Devon Guarantor of a voluntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated as bankrupt or insolvent, or the consent by it to the entry of a
decree
5
or order for relief in respect of the New Devon Guarantor in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any applicable federal
or state law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver, liquidation,
assignee, trustee, sequestrator or similar official of the New Devon Guarantor
or of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors; or
(j) any other Event of Default provided with respect to
Debentures of such series.
Section 1.3 The first sentence of Section 5.2 of the Base Indenture is
hereby amended by deleting "If an Event of Default described in clause (a), (b),
(c), (d), (g) or (h)" and inserting in lieu thereof the following: "If an Event
of Default described in clause (a), (b), (c), (d), (g), or (j)". The second
sentence of Section 5.2 of the Base Indenture is hereby amended by deleting "(e)
or (f)" and inserting in lieu thereof the following: "(e), (f), (h) or (i)".
Section 1.4 The Base Indenture is hereby amended to add the following
provisions as a new Section 7.3A to be inserted immediately following Section
7.3 of the Base Indenture:
Section 7.3A Reports by New Devon Guarantor. The New Devon Guarantor
shall:
(a) file with the Trustee, within 15 days after the New Devon
Guarantor is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the New Devon Guarantor may be required
to file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act; or, if the New Devon Guarantor is not required to file
information, documents or reports pursuant to either of such Sections, then it
shall file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in
6
respect of a security listed and registered on a national securities exchange as
may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports required to be filed with respect
to compliance by the New Devon Guarantor with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit to all Holders, in the manner and to the extent
provided in Trust Indenture Act Section 313(c) within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the New Devon Guarantor pursuant to paragraphs
(a) and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute notice of any information contained therein or determinable from
information contained therein, including the New Devon Guarantor's compliance
with any of its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on Officers' Certificates).
ARTICLE II
CONVERSION OF DEBENTURES
Section 2.1 Article XIV of the Base Indenture is hereby amended by
deleting Section 14.6, 14.7 and 14.8 and inserting in lieu thereof the
following:
"Section 14.6 Reservation of Shares of Common Stock. The New Devon
Guarantor shall at all times reserve and keep available, free from preemptive
rights, out of its authorized but unissued Common Stock or treasury shares, for
the purpose of effecting the conversion of Debentures, the full number of shares
of Common Stock of the New Devon Guarantor then issuable upon the conversion of
all outstanding Debentures of any series that has conversion rights.
Section 14.7 Payment of Certain Taxes upon Conversion. The New Devon
Guarantor will pay any and all taxes that may be payable in respect of the issue
or delivery of shares of its Common Stock on conversion of Debentures
7
pursuant hereto. The New Devon Guarantor shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of its Common Stock in a name other than that of the
Holder of the Debentures or Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the New Devon Guarantor the amount of any such tax, or has established,
to the satisfaction of the New Devon Guarantor, that such tax has been paid.
Section 14.8 Nonassessability. The New Devon Guarantor covenants
that all shares of Common Stock which may be issued upon conversion of
Debentures will upon issue in accordance with the terms hereof be duly and
validly issued and fully paid and nonassessable."
Section 2.2 Section 1.16 of the Base Indenture is hereby amended by
deleting all references to "the Company" and inserting in lieu thereof " the
Company or the New Devon Guarantor" and by adding at the end of the first
paragraph thereof after the word "Debentures" the following: "provided, however,
that the foregoing shall not affect or impair the obligations of the New Devon
Guarantor hereunder."
Section 2.3 Section 6.1 of the First Supplemental Indenture is hereby
amended by deleting all references to "the Company" and inserting in lieu
thereof "the New Devon Guarantor."
Section 2.4 Section 6.2(a) of the First Supplemental Indenture is
hereby amended by deleting all references to "the Company" and inserting in lieu
thereof "the New Devon Guarantor."
Section 2.5 Section 6.2(b) of the First Supplemental Indenture is
hereby amended by deleting the first reference to "the Company" and inserting in
lieu thereof "the New Devon Guarantor."
Section 2.6 Section 6.2(c) of the First Supplemental Indenture is
hereby amended by deleting the reference to "the Company" and inserting in lieu
thereof "the New Devon Guarantor."
Section 2.7 Sections 6.3, 6.4, 6.5, 6.6, 6.7 and 6.8 of the First
Supplemental Indenture are hereby amended by deleting all references to "the
Company" and inserting in lieu thereof "the New Devon Guarantor."
8
Section 2.8 The thirteenth paragraph of the [Form of Reverse of
Debenture] of Section 7.1 of the First Supplemental Indenture is hereby amended
by deleting the reference to "the Company" and inserting in lieu thereof "the
Company or the New Devon Guarantor", and by adding at the end of such thirteenth
paragraph in the [Form of Reverse of Debenture] after the word "released" the
following: "; provided, however, that the foregoing shall not affect or impair
the obligations of the New Devon Guarantor hereunder."
Section 2.9 The Company and the New Devon Guarantor confirm and agree
that, in accordance with the proviso to Section 6.4(c)(ii) of the First
Supplemental Indenture, the Conversion Price in effect immediately prior to the
Merger shall be the Conversion Price in effect immediately after the Merger and
thereafter unless and until adjusted in accordance with the Indenture.
ARTICLE III
Section 3.1 The New Devon Guarantor hereby covenants and warrants that
(a) immediately after the effective time of the Merger (the "Effective Time"),
no condition or event shall exist which constitutes or would, after notice or
lapse of time or both, constitute an Event of Default (as defined in the
Indenture), (b) it has complied, or has caused the Company to comply, and will
comply, or will cause the Company to comply, with all applicable provisions of
Article X of the Indenture and (c) it has been authorized by its Board of
Directors, pursuant to Section 9.1 of the Base Indenture, to execute this Second
Supplemental Indenture.
ARTICLE IV
Section 4.1 Guaranty of Debentures. The Indenture is hereby amended to
add the following provisions as a new Article XVI to be inserted immediately
following Article XV of the Indenture. Article XVI shall apply to the
Convertible Debentures only.
9
ARTICLE XVI
SUBORDINATED GUARANTY OF CONVERTIBLE DEBENTURES
Section 16.1 New Devon Guaranty. Subject to the provisions of this
Article XVI , the New Devon Guarantor hereby unconditionally guarantees, on a
subordinated basis as set forth more fully in this Article XVI, to each holder
of a Convertible Debenture authenticated and delivered by the Trustee in
accordance with the Indenture (i) the due and punctual payment of the principal
of, premium, if any, and interest (including interest on other amounts which may
accrue after the filing against the Company of a petition under the United
States Bankruptcy Code (the "Bankruptcy Code"), whether or not the obligation to
pay interest on such amounts shall be enforceable against the Company) on such
Convertible Debenture, when and as the same shall become due and payable,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal of, premium and interest, if any, on such
Convertible Debenture, to the extent lawful, and the due and punctual
performance of all obligations of the Company under the Securities Guarantees
and all other obligations of the Company to the holders or the Trustee all in
accordance with the terms of such Convertible Debenture and of this Indenture,
and (ii) in the case of any extension of time of payment or renewal of any such
Convertible Debenture or any of such other obligations, that the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, at stated maturity, by acceleration or otherwise. A
demand for payment under this Article XVI shall not be effective prior to 48
hours after a demand upon the Company for full and complete payment of all
amounts due and payable under the Convertible Debentures, unless such demand
upon the Company shall be stayed by operation of Section 362 of the Bankruptcy
Code or otherwise. In all other respects, the New Devon Guarantor hereby agrees
that its obligations hereunder shall be absolute and unconditional, irrespective
of, and shall be unaffected by, any invalidity, irregularity or unenforceability
of any such Convertible Debenture or this Indenture, any failure to enforce the
provisions of any such Convertible Debenture or this Indenture, any waiver,
modification or indulgence granted to the Company with respect thereto, by the
holder of such Convertible Debenture or the Trustee, or any other circumstances
which may otherwise constitute a legal or equitable discharge of a surety or New
Devon Guarantor. The New Devon Guarantor hereby waives diligence, presentment,
filing of claims with a court in the event of merger or bankruptcy of the
Company, any right to require a proceeding first against the Company, the
benefit of discussion, protest or notice with respect to any such Convertible
Debenture or the debt evidenced thereby and all demands whatsoever (except as
specified above), and covenants, that this New Devon Guaranty
10
will not be discharged as to any such Convertible Debenture except by payment in
full of the principal thereof, premium if any, and interest thereon. The New
Devon Guarantor further agrees that, as between the New Devon Guarantor, on the
one hand, and the Convertible Debenture holder and the Trustee, on the other
hand, (i) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article Five hereof for the purposes of this New Devon Guaranty
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, provided that
notice of such acceleration has been given to the New Devon Guarantor by the
Trustee, and (ii) in the event of any declarations of acceleration of such
obligations as provided in Article Five hereof, such obligations (whether or not
due and payable) shall forthwith become due and payable by the New Devon
Guarantor for the purpose of this New Devon Guaranty. The New Devon Guarantor
shall be subrogated to all rights of the holders of any Convertible Debentures
against the Company in respect of any amounts paid to the Convertible Debenture
holder by the New Devon Guarantor pursuant to the provisions of this New Devon
Guaranty; provided that the New Devon Guarantor shall not be entitled to
enforce, or to receive any payments arising out of or based upon, such right of
subrogation until the principal of, premium, if any, and interest on all the
Convertible Debentures shall have been paid in full and until all amounts
payable under any Senior Indebtedness shall have been paid in full.
Section 16.2 New Devon Guaranty Subordinate to Guarantor Senior
Indebtedness. The New Devon Guarantor covenants and agrees, and each Holder of
a Convertible Debenture, by the Holder's acceptance thereof, likewise covenants
and agrees, that, to the extent and in the manner hereinafter set forth in this
Article, the obligations of the New Devon Guarantor under the New Devon Guaranty
(the "Guarantor Obligations") are hereby expressly made subordinate and junior
in right of payment to the prior payment in full of all Guarantor Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred. No provision of this Article shall prevent the occurrence of any
default or Event of Default hereunder.
Section 16.3 Payment Over of Proceeds Upon Dissolution, Etc. Upon
any payment by the New Devon Guarantor or distribution of assets of the New
Devon Guarantor of any kind or character, whether in cash, property or
securities, to creditors upon any dissolution or winding-up or liquidation or
reorganization of the New Devon Guarantor, whether voluntary or involuntary or
in bankruptcy, insolvency, receivership or other proceedings, all amounts due
upon all Guarantor Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the New Devon Guarantor
11
on the Guarantor Obligations; and upon any such dissolution or winding-up or
liquidation or reorganization, any payment by the New Devon Guarantor, or
distribution of assets of the New Devon Guarantor of any kind or character,
whether in cash, property or securities, to which the Holders of the Convertible
Debentures or the Trustee would be entitled to receive from the New Devon
Guarantor, except for the provisions of this Article, shall be paid by the New
Devon Guarantor or by any receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Convertible Debentures or by the Trustee under the Indenture if received by
them or it, directly to the holders of Guarantor Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Guarantor Senior
Indebtedness held by such holders, as calculated by the New Devon Guarantor) or
their representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay such Guarantor Senior Indebtedness in full, in money
or money's worth, after giving effect to any concurrent payment or distribution
to or for the holders of such Guarantor Senior Indebtedness, before any payment
or distribution is made to the Holders of the Convertible Debentures or to the
Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the New Devon Guarantor of any kind or character,
whether in cash, property or securities, prohibited by the foregoing, shall be
received by the Trustee before all Guarantor Senior Indebtedness is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to the holders of such Guarantor Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Guarantor Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the New Devon Guarantor, for application
to the payment of all Guarantor Senior Indebtedness, as the case may be,
remaining unpaid to the extent necessary to pay such Guarantor Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Guarantor Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the New Devon
Guarantor as reorganized or readjusted, or securities of the New Devon Guarantor
or any other corporation provided for by a plan of reorganization or
readjustment which are
12
subordinated in right of payment to all Guarantor Senior Indebtedness which may
at the time be outstanding to substantially the same extent as, or to a greater
extent than, the New Devon Guaranty is so subordinated as provided in this
Article. The consolidation of the New Devon Guarantor with, or the merger of the
New Devon Guarantor into, another Person or the liquidation or dissolution of
the New Devon Guarantor following the conveyance or transfer of its properties
and assets substantially as an entirety to another Person upon the terms and
conditions set forth in Article XVII shall not be deemed a dissolution, winding
up, liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the New Devon Guarantor for the
purposes of this Section if the Person formed by such consolidation or into
which the New Devon Guarantor is merged or the Person which acquires by
conveyance or transfer such properties and assets substantially as an entirety,
as the case may be, shall, as a part of such consolidation, merger, conveyance
or transfer, comply with the condition set forth in Article XVII.
Section 16.4 Prior Payment to Guarantor Senior Indebtedness Upon
Acceleration of Convertible Debentures. In the event that any Convertible
Debentures are declared due and payable before their Stated Maturity, then and
in such event the holders of Guarantor Senior Indebtedness shall be entitled to
receive payment in full of all amounts due or to become due on or in respect of
all Guarantor Senior Indebtedness or provision shall be made for such payment in
cash, before the Holders of the Convertible Debentures are entitled to receive
any payment (including any payment which may be payable by reason of the payment
of any other indebtedness of the New Devon Guarantor being subordinated to the
Guarantor Obligations) by the New Devon Guarantor under the Guarantor
Obligations or on account of the purchase or other acquisition of Convertible
Debentures.
In the event that, notwithstanding the foregoing, the New Devon
Guarantor shall make any payment to the Trustee or the Holder of any Convertible
Debenture prohibited by the foregoing provisions of this Section, and if such
fact shall, at or prior to the time of such payment, have been made known to the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the New Devon Guarantor.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
Section 16.5 No Payment When Guarantor Senior Indebtedness in
Default. In the event and during the continuation of any default by the New
Devon Guarantor in the payment of principal, premium, interest or any other
payment due
13
on any Guarantor Senior Indebtedness, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Guarantor Senior Indebtedness, as the case may be, has been accelerated because
of a default, then, in any such case, no payment shall be made by the New Devon
Guarantor with respect to the Guarantor Obligations until such default is cured
or waived or ceases to exist or any such acceleration or demand for payment has
been rescinded.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.5 such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Guarantor
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that the holders of the Guarantor Senior Indebtedness (or
their representative or representatives or a trustee) notify the Trustee in
writing within 90 days of such payment of the amounts then due and owing on the
Guarantor Senior Indebtedness and only the amounts specified in such notice to
the Trustee shall be paid to the holders of Guarantor Senior Indebtedness.
Section 16.6 Payment Permitted in Certain Situations. Nothing
contained in this Article or elsewhere in this Indenture or in any of the
Convertible Debentures shall prevent (a) the New Devon Guarantor, at any time
except during the pendency of any dissolution, winding-up, liquidation or
reorganization of the New Devon Guarantor, whether voluntary or involuntary or
any bankruptcy, insolvency, receivership or other proceedings of the New Devon
Guarantor referred to in Section 16.3 or under the conditions described in
Section 16.4 or 16.5, from making payments at any time of principal of or
premium, if any, or interest on the Convertible Debentures, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest
on the Convertible Debenture or the retention of such payment by the Holders,
if, at the time of such application by the Trustee, it did not have knowledge
that such payment would have been prohibited by the provisions of this Article.
Section 16.7 Subrogation to Rights of Holders of Guarantor Senior
Indebtedness. Subject to the payment in full of all Guarantor Senior
Indebtedness or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Guarantor Senior
Indebtedness, the rights of the Holders of Convertible Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Guarantor Senior Indebtedness pursuant to the provisions of this Article
(equally and ratably with the holders of indebtedness of
14
the New Devon Guarantor which by its express terms is subordinated to
indebtedness of the New Devon Guarantor to substantially the same extent as the
Guarantor Obligations are subordinated to the Guarantor Senior Indebtedness and
is entitled to like rights of subrogation) to the rights of the holders of such
Guarantor Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Guarantor Senior Indebtedness until
the principal of (and premium, if any) and interest on the Convertible
Debentures shall be paid in full. For purposes of such subrogation, no payments
or distributions to the holders of the Guarantor Senior Indebtedness of any
cash, property or securities to which the Holders of Convertible Debentures or
the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to or for the benefit
of the holders of Guarantor Senior Indebtedness by Holders of Convertible
Debentures or the Trustee, shall, as among the New Devon Guarantor, its
creditors other than holders of Guarantor Senior Indebtedness and the Holders of
Convertible Debentures, be deemed to be payment or distribution by the New Devon
Guarantor to or on account of the Guarantor Senior Indebtedness.
Section 16.8 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Convertible Debentures on the one
hand and the holders of Guarantor Senior Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Convertible Debentures is intended to or shall (a) impair, as among the New
Devon Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of Convertible Debentures, the obligation of the
New Devon Guarantor, which is absolute and unconditional (and which, subject to
the rights under this Article of the holders of Guarantor Senior Indebtedness,
is intended to rank equally with all other general obligations of the New Devon
Guarantor), to pay to the Holders of Convertible Debentures the Guarantor
Obligations as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the New Devon Guarantor
of the Holders of Convertible Debentures and creditors of the New Devon
Guarantor, as the case may be, other than the holders of Guarantor Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Convertible
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Guarantor Senior Indebtedness to receive cash,
property and securities otherwise payable or deliverable to the Trustee or such
Holder.
Section 16.9 Trustee to Effectuate Subordination. Each Holder of a
Convertible Debenture by such Holder's acceptance thereof authorizes and directs
the
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Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
Section 16.10 No Waiver of Subordination Provisions. No right of any
present or future holder of any Guarantor Senior Indebtedness to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the New Devon Guarantor or
by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the New Devon Guarantor with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Convertible Debentures, without incurring responsibility to the Holders of
Convertible Debentures and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of
Convertible Debentures to the holders of Guarantor Senior Indebtedness do any
one or more of the following: (a) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Guarantor Senior
Indebtedness or otherwise amend or supplement in any manner Guarantor Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Guarantor Senior Indebtedness is outstanding; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing
Guarantor Senior Indebtedness; (c) release any Person liable in any manner for
the collection of Guarantor Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the New Devon Guarantor and any other Person.
Section 16.11 Notice to Trustee. The New Devon Guarantor shall give
prompt written notice to a Responsible Officer of the Trustee of any fact known
to the New Devon Guarantor which would prohibit the making of any payment to or
by the Trustee in respect of the Guarantor Obligations pursuant to the
provisions of this Article. Notwithstanding the provisions of this Article or
any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment to or by the Trustee in respect of the Guarantor Obligations pursuant to
the provisions of this Article, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof from the New Devon Guarantor
or a holder or holders of Guarantor Senior
16
Indebtedness or from any trustee therefor; and, prior to the receipt of any such
written notice, the Trustee, subject to the provisions of Section 6.2, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall have not received the notice provided for in this
Section at least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment under the Guarantor Obligations), then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such money and to apply the same to the purposes for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.2, the Trustee shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Guarantor Senior Indebtedness (or
a trustee therefor) to establish that such notice has been given by a holder of
Guarantor Senior Indebtedness (or a trustee therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any person as a holder of Guarantor Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Guarantor Senior Indebtedness held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article, and if such evidence is not furnished, the Trustee
may defer any payment to such Person pending judicial determination as to the
right of such person to receive such payment.
Section 16.12 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the New Devon Guarantor
referred to in this Article, the Trustee, subject to the provisions of Section
6.2, and the Holders of Convertible Debentures shall be entitled to conclusively
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Convertible Debentures, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Guarantor Senior
Indebtedness and other indebtedness of the New Devon Guarantor, as the case
17
may be, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
Section 16.13 Trustee Not Fiduciary for Holders of Guarantor Senior
Indebtedness. With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of such Guarantor Senior
Indebtedness shall be read into the Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and shall not be liable to any such holders or creditors if it
shall in good faith pay over or distribute to Holders of Convertible Debentures
or to the New Devon Guarantor or to any other Person cash, property or
securities to which any holders of Guarantor Senior Indebtedness shall be
entitled by virtue of this Article or otherwise.
Section 16.14 Rights of Trustee as Holder of Guarantor Senior
Indebtedness, Preservation of Trustee's Rights. The Trustee in its individual
capacity shall be entitled to all the rights set forth in this Article with
respect to any Guarantor Senior Indebtedness which may at any time be held by
it, to the same extent as any other holder of Guarantor Senior Indebtedness and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
Section 16.15 Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company or the New Devon Guarantor and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 16.14 shall not apply to the New Devon Guarantor or any
Affiliate of the New Devon Guarantor if it or such Affiliate acts as Paying
Agent.
Section 16.16 Certain Conversions Deemed Payment. For the purposes of
this Article only, (a) the issuance and delivery of junior securities (or cash
paid in lieu of fractional shares) upon conversion of Convertible Debentures in
accordance with Article XIV, or pursuant to the terms set forth in an Officers'
Certificate or established in one or more indentures supplemental hereto in
accordance
18
with Section 3.1, shall not be deemed to constitute a payment or distribution on
account of the Guarantor Obligations or on account of the purchase or other
acquisition of Convertible Debentures, and (b) the payment, issuance or delivery
of cash, property or securities (other than junior securities and cash paid in
lieu of fractional shares) upon conversion of a Convertible Debenture shall be
deemed to constitute payment on account of the principal of such Convertible
Debenture. For the purposes of this Section, the term "junior securities" means
(i) shares of any stock of any class of the New Devon Guarantor and (ii)
securities of the New Devon Guarantor which are subordinated in right of payment
to all Guarantor Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Guarantor Obligations are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Convertible Debentures is intended to or shall impair, as
among the New Devon Guarantor, its creditors other than holders of Guarantor
Senior Indebtedness and the Holders of Convertible Debentures, the right, which
is absolute and unconditional, of the Holder of any Convertible Debenture to
convert such Convertible Debenture in accordance with Article XIV.
Section 16.17 Execution of Guaranty. To evidence its New Devon
Guaranty to the Convertible Debenture Holders specified in Section 16.1, the New
Devon Guarantor hereby agrees to execute the New Devon Guaranty in substantially
the form above recited to be endorsed on each Convertible Debenture
authenticated and delivered by the Trustee after the Effective Time or, in lieu
thereof, stamp each such Convertible Debenture with an appropriate notation on
such Convertible Debenture. The New Devon Guarantor hereby agrees that its New
Devon Guaranty set forth in Section 16.1 shall remain in full force and effect
notwithstanding any failure to include such endorsement or notation of such New
Devon Guaranty on each Convertible Debenture. If applicable, the New Devon
Guaranty shall be signed on behalf of the New Devon Guarantor by its Chairman of
the Board, Chief Executive Officer, President or a Vice President, prior to the
authentication of the Convertible Debenture on which it is endorsed, and the
delivery of such Convertible Debenture by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the New Devon Guaranty on
behalf of the New Devon Guarantor. Such signatures upon the New Devon Guaranty
may be manual or facsimile signatures of the present, past or any future such
officers and may be imprinted or otherwise reproduced on the New Devon Guaranty,
and in case any such officer who shall have signed the New Devon Guaranty shall
cease to be such officer before the Convertible Debenture on which such New
Devon Guaranty is endorsed shall have been authenticated and delivered by the
Trustee or disposed of by the Company, such Convertible
19
Debenture nevertheless may be authenticated and delivered or disposed of as
though the person who signed the New Devon Guaranty had not ceased to be such
officer of the New Devon Guarantor.
Section 16.18 Termination of Guaranty. The New Devon Guaranty shall
terminate upon the date on which there are no Convertible Debentures outstanding
under the Indenture.
ARTICLE V
NEW DEVON GUARANTOR CONSOLIDATION, MERGER,
SALE OR CONVEYANCE
Section 17.1 The Indenture is hereby amended to add the following
provisions as a new Article XVII to be inserted immediately following Article
XVI of the Indenture.
ARTICLE XVII
NEW DEVON GUARANTOR CONSOLIDATION, MERGER,
SALE OR CONVEYANCE
Section 17.1 New Devon Guarantor May Consolidate, Etc. on Certain
Terms. The New Devon Guarantor shall not merge or consolidate with any other
corporation or sell or convey all or substantially all of its assets to any
Person, unless (a) either the New Devon Guarantor shall be the continuing
corporation, or the successor corporation (if other than the New Devon
Guarantor) shall be a corporation organized under the laws of the United States
of America or any State thereof and shall expressly assume the Guarantor
Obligations, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed or observed by the
New Devon Guarantor, by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, and (b) the New Devon
Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition.
Section 17.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption by
the successor corporation, such successor corporation shall succeed to and be
substituted for the New Devon Guarantor, with the same effect as if it had been
named herein. Such successor corporation may cause to be signed, and may issue
either in its own
20
name or in the name of the New Devon Guarantor prior to such succession the New
Devon Guaranty to be endorsed upon the Convertible Debentures issuable hereunder
which theretofore shall not have been signed by the New Devon Guarantor and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the New Devon Guarantor and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any securities which previously shall have been signed and
delivered by the officers of the New Devon Guarantor, to the Trustee for
authentication, and any such endorsement which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the New Devon Guarantor or any successor corporation which
shall theretofore have become such in the manner described in this Article shall
be discharged from all obligations and covenants under this Indenture and the
Convertible Debentures and may be liquidated and dissolved.
Section 17.3 Opinion of Counsel to Trustee. The Trustee may receive
an Opinion of Counsel, prepared in accordance with Section 1.2, as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
ARTICLE VI
MISCELLANEOUS
Section 6.1 This Second Supplemental Indenture shall become effective
at the Effective Time and shall be automatically null and void if and in the
event that the Merger shall not become effective on or prior to December 31,
1999.
Section 6.2 After the Effective Time, any Convertible Debentures
authenticated and delivered in substitution for, or in lieu of, Convertible
Debentures then outstanding and all Convertible Debentures presented or
delivered to the Trustee on and after the Effective Time for such purpose shall
be either restated to give the
21
effect to the Second Supplemental Indenture or, in lieu thereof, stamped with a
notation substantially as follows:
The principal amount of this Debenture has become convertible into
shares of the Common Stock, par value $0.10 per share, of Devon Energy
Corporation, a Delaware corporation, at a conversion price per share in
accordance with the terms of the Indenture, such conversion price being
subject to certain adjustments as set forth in the Indenture. Reference
herein to "Common Stock of the Company" or the "Company's Common Stock"
shall be deemed to be to the Common Stock of Devon Energy Corporation.
The payment of principal of, premium, if any, and interest on the
Debentures has been guaranteed by Devon Energy Corporation on a
subordinated basis as set forth in the Indenture. The Indenture, dated
as of July 3, 1996, referred to in this Debenture, as amended by the
First Supplemental Indenture, dated as of July 3, 1996, has been
further amended by a Second Supplemental Indenture, dated as of August
17, 1999, to provide for such convertibility and guarantee. Reference
is hereby made to said Second Supplemental Indenture, copies of which
are on file with Devon Energy Corporation, for a statement of the
amendment therein made.
Nothing contained in this Second Supplemental Indenture shall require the
holder of any Convertible Debenture to submit or exchange such Convertible
Debenture prior to the Effective Time in order to obtain the benefits of the New
Devon Guaranty or any other provisions hereunder.
The Company agrees to provide the Trustee with a stamp or means of
reproducing the above legend on the Convertible Debentures without materially
obscuring the text of the Convertible Debentures.
Anything herein contained to the contrary notwithstanding, the Trustee
shall not at any time be under any responsibility to acquire or cause any
Convertible Debenture now or hereafter outstanding to be presented or delivered
to it for any purpose provided for in this Section.
Section 6.3 Ratification of Indenture; Second Supplemental Indenture
Controls. The Indenture, as supplemented by the First Supplemental Indenture and
this Second Supplemental Indenture, is in all respects ratified and confirmed,
and this Second Supplemental Indenture shall be deemed part of the Indenture in
the manner and to the extent herein and therein provided. The provisions of this
Second
22
Supplemental Indenture shall supercede the provisions of the Base Indenture and
First Supplemental Indenture to the extent they are inconsistent herewith.
Section 6.4 Trustee Not Responsible for Recitals. The recitals herein
contained are made by the Company and the New Devon Guarantor and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
Second Supplemental Indenture.
Section 6.5 Governing Law. This Second Supplemental Indenture shall be
governed by, and construed in accordance with, the laws of the State of New
York, as applied to contracts made and performed within the State of New York,
without regard to principles of conflict of laws.
Section 6.6 Separability. In case any one or more of the provisions
contained in this Second Supplemental Indenture or in the Convertible Debentures
shall for any reason be held to be invalid or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provisions
of this Second Supplemental Indenture or of the Convertible Debentures, but this
Second Supplemental Indenture and the Convertible Debentures shall be construed
as if such invalid or illegal or unenforceable provision had never been
contained herein or therein.
Section 6.7 Counterparts. This Second Supplemental Indenture may be
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Second
Supplemental Indenture to be duly executed as of the date first above written.
DEVON ENERGY CORPORATION
By: /s/ J. Xxxxx Xxxxxxx
----------------------------------------
Name: J. Xxxxx Xxxxxxx
Title: President
DEVON ENERGY CORPORATION (OKLAHOMA)
By: /s/ J. Xxxxx Xxxxxxx
----------------------------------------
Name: J. Xxxxx Xxxxxxx
Title: President
THE BANK OF NEW YORK,
as Trustee
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Assistant Vice President
24
