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EXHIBIT 4.2
[FORM]
CONOCO FUNDING COMPANY
5.45% Notes due 2006
6.35% Notes due 2011
7.25% Notes due 2031
Fully and Unconditionally Guaranteed by
CONOCO INC.
Three series of Securities are hereby established pursuant to Section
2.01 of the Indenture dated as of October 11, 2001 (the "Indenture") between
Conoco Funding Company (the "Company"), Conoco Inc. and Bank One, N.A., as
trustee (the "Trustee"), as follows:
1. Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Indenture.
2. The title of the 5.45% Notes due 2006 shall be "5.45% Notes due
2006" (the "2006 Notes"), the title of the 6.35% Notes due 2011 shall be "6.35%
Notes due 2011" (the "2011 Notes") and the title of the 7.25% Notes due 2031
shall be "7.25% Notes due 2031" (the "2031 Notes" and, together with the 2006
Notes and the 2011 Notes, the "Notes").
3. The limit upon the aggregate principal amount of the 2006 Notes, the
2011 Notes and the 2031 Notes that may be authenticated and delivered under the
Indenture (except for Notes of such series authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes of
such series pursuant to Section 2.08, 2.09, 2.12, 2.17, 3.07 or 9.05 of the
Indenture and except for any Notes of such series which, pursuant to Section
2.04 or 2.17 of the Indenture, are deemed never to have been authenticated and
delivered thereunder) is $1,250,000,000, $1,750,000,000 and $500,000,000,
respectively; provided, however, that the authorized aggregate principal amount
of the 2011 Notes and the 2031 Notes may be increased before or after the
issuance of any Notes of such series until October 12, 2006 and October 12,
2026, respectively, by a Board Resolution (or action pursuant to a Board
Resolution) to such effect.
4. The Notes shall be issued as permanent Global Securities under the
Indenture. The Depository Trust Company and the Trustee are hereby designated as
the Depositary and the Security Custodian, respectively, for the Global
Securities under the Indenture.
5. The date on which the principal of the 2006 Notes, the 2011 Notes
and the 2031 Notes is payable shall be October 15, 2006, October 15, 2011 and
October 15, 2031, respectively.
6. The rate at which the 2006 Notes shall bear interest shall be 5.45%
per annum, the rate at which the 2011 Notes shall bear interest shall be 6.35%
per annum and the rate at which the 2031 Notes shall bear interest shall be
7.25% per annum. Interest shall be
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computed on the basis of a 360-day year of twelve 30-day months. No Additional
Amounts with respect to the Notes shall be payable. The date from which interest
shall accrue for the Notes of each series shall be October 11, 2001. The
Interest Payment Dates on which such interest shall be payable shall be April 15
and October 15 of each year, commencing April 15, 2002. The record dates for the
interest payable on the Notes on any Interest Payment Date shall be the April 1
and October 1, as the case may be, next preceding such Interest Payment Date.
7. The place or places where the principal of, premium (if any) on and
interest on the Notes shall be payable shall be the office or agency of the
Company maintained for that purpose, initially the office of the Trustee, in The
City of New York, and any other office or agency maintained by the Company for
such purpose. Payments in respect of Notes evidenced by a Global Security
(including principal, premium, if any, and interest) shall be made by wire
transfer of immediately available funds to the accounts specified by the Holder
of such Notes. In all other cases, at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as such address shall appear in the register of the Notes maintained by
the Registrar.
8. The Paying Agent and Registrar for the Notes of each series
initially shall be the Trustee. In addition, as long as the Notes of any series
are listed on the Luxembourg Stock Exchange, the Company shall maintain a Paying
Agent and Registrar for the Notes of such series in Luxembourg, which initially
shall be Kredietbank S.A. Luxembourg.
9. The Notes of each series are subject to redemption and repayment, in
whole or in part, at any time and from time to time, at the option of the
Company, upon not less than 30 nor more than 60 days' prior notice as provided
in the Indenture, at a Redemption Price equal to the sum of (i) 100% of the
principal amount of the Notes of such series to be redeemed and repaid and (ii)
the amount, if any, by which the sum of the present values of the Remaining
Scheduled Payments thereon, discounted to the Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus 25 basis points for the 2006 Notes, 30 basis points for the
2011 Notes and 35 basis points for the 2031 Notes, exceeds the principal amount
of the Notes to be redeemed and repaid, in each case plus accrued and unpaid
interest thereon to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate
per annum equal to (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue; provided that
if no maturity is within three months before or after the Stated Maturity for
the applicable series of Notes, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined and
the Treasury Rate will be interpolated or extrapolated from such yields on a
straight-line basis rounding to the nearest month; or (ii) if such release (or
any successor release) is not published during the week preceding such
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
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such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the applicable series of Notes.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation (and its successors), J.P. Morgan Securities Inc. (and its
successors) and Salomon Smith Barney Inc. (and its successors) and one other
nationally recognized investment banking firm that is a Primary Treasury Dealer
specified from time to time by the Company; provided, however, that if any of
the foregoing shall cease to be a primary U.S. Government securities dealer (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
nationally recognized investment banking firm that is a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer as of 3:30 p.m., New
York time, on the third Business Day preceding such Redemption Date.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed and repaid, the remaining scheduled payments of the principal thereof
and interest thereon that would be due after the related Redemption Date but for
such redemption and repayment; provided, however, that, if such Redemption Date
is not an Interest Payment Date with respect to such Note, the amount of the
next succeeding scheduled interest payment thereon will be reduced by the amount
of interest accrued thereon to such Redemption Date.
10. The Company shall have no obligation to redeem, purchase or repay
Notes pursuant to any sinking fund or analogous provision or at the option of a
Holder thereof.
11. The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Annex A hereto (the "Form of Note").
12. Each Note that is a Global Security shall bear the legend set forth
on the face of the Form of Note.
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Annex A
[FACE OF SECURITY]
CONOCO FUNDING COMPANY
[5.45% NOTE DUE 2006] [6.35% NOTE DUE 2011] [7.25% NOTE DUE 2031]
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC.
CUSIP No._____________
No.____________ $_____________
Conoco Funding Company, an unlimited liability company incorporated
under the laws of Nova Scotia, Canada (the "Company," which term includes any
successor Person under the Indenture hereinafter referred to), for value
received, promises to pay to ____________ or registered assigns, the principal
sum of ___________________________Dollars [, or such greater or lesser amount as
indicated on the Schedule of Exchanges of Securities hereto,](1) on October 15,
[2006] [2011] [2031].
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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(1) This phrase to be included only if the Security is a Global Security.
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IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officers and its corporate seal
or a facsimile thereof to be affixed hereto or imprinted hereon.
Dated:
[SEAL] CONOCO FUNDING COMPANY
By:
--------------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
GUARANTEE
Conoco Inc., a Delaware corporation formerly incorporated under the
name Conoco Energy Company, unconditionally guarantees to the holder of this
Security, upon the terms and subject to the conditions set forth in the
Indenture referenced on the reverse hereof, (a) the full and prompt payment of
the principal of and any premium on this Security when and as the same shall
become due, whether at the stated maturity thereof, by acceleration, redemption
or otherwise, and (b) the full and prompt payment of interest on this Security
when and as the same shall become due, subject to any applicable grace period.
CONOCO INC.
By:
--------------------------------------
Name:
Title:
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Certificate of Authentication:
This is one of the Securities of the series designated therein referred to in
the within- mentioned Indenture.
BANK ONE, N.A., as Trustee
By:
--------------------------------------------------------
Authorized Officer
[Unless and until it is exchanged in whole or in part for Securities in
definitive form, this Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. The Depository Trust Company (55 Water Street, New York, New York),
a New York corporation ("DTC"), shall act as the Depositary until a successor
shall be appointed by the Company and the Registrar. Unless this certificate is
presented by an authorized representative of DTC to the issuer or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.] (2)
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(2) This paragraph to be included only if the Security is a Global Security.
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[REVERSE OF SECURITY]
CONOCO FUNDING COMPANY
[5.45% NOTE DUE 2006] [6.35% NOTE DUE 2011] [7.25% NOTE DUE 2031]
FULLY AND UNCONDITIONALLY GUARANTEED BY
CONOCO INC.
This Security is one of a duly authorized issue of [5.45% Notes due
2006] [6.35% Notes due 2011] [7.25% Notes due 2031] (the "Securities") of Conoco
Funding Company, an unlimited liability company incorporated under the laws of
Nova Scotia, Canada (the "Company").
1. Interest. The Company promises to pay interest on the principal
amount of this Security at [5.45] [6.35] [7.25]% per annum from October 11, 2001
until maturity. The Company will pay interest semiannually on April 15 and
October 15 of each year (each an "Interest Payment Date"), or if any such day is
not a Business Day, on the next succeeding Business Day. Interest on the
Securities will accrue from the most recent Interest Payment Date on which
interest has been paid or, if no interest has been paid, from October 11, 2001;
provided that if there is no existing Default in the payment of interest, and if
this Security is authenticated between a record date referred to on the face
hereof (each, a "Record Date") and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be April 15, 2002. The
Company shall pay interest on overdue principal and premium (if any) from time
to time at a rate equal to the interest rate then in effect; it shall pay
interest on overdue installments of interest (without regard to any applicable
grace periods) from time to time at the same rate to the extent lawful. Interest
will be computed on the basis of a 360-day year consisting of twelve 30-day
months.
2. Guarantee. Conoco Inc., a Delaware corporation formerly incorporated
under the name Conoco Energy Company (the "Guarantor"), unconditionally
guarantees to the Holders from time to time of the Securities, upon the terms
and subject to the conditions set forth in the Indenture (as defined below), (a)
the full and prompt payment of the principal of and any premium on the
Securities when and as the same shall become due, whether at the Stated Maturity
thereof, by acceleration, redemption or otherwise, and (b) the full and prompt
payment of any interest on the Securities when and as the same shall become due,
subject to any applicable grace period. Each and every default in the payment of
the principal of, premium (if any) and interest on the Securities shall give
rise to a separate cause of action under the Indenture, and separate suits may
be brought thereunder as each cause of action arises. The Guarantee constitutes
a guarantee of payment and not of collection. In the event of a default in the
payment of principal of or any premium on the Securities when and as the same
shall become due, whether at the Stated Maturity thereof, by acceleration, call
for redemption and repayment or otherwise, or in the event of a default in the
payment of any interest on the Securities when and as the same shall become due,
each of the Trustee and the Holders of the Securities shall have the right to
proceed first and directly against the Guarantor under the Indenture without
first
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proceeding against the Company or exhausting any other remedies which the
Trustee or such Holder may have and without resorting to any other security held
by it.
3. Method of Payment. The Company will pay interest on the Securities
(except defaulted interest) to the Persons who are registered Holders of
Securities at the close of business on the Record Date next preceding the
Interest Payment Date, even if such Securities are canceled after such Record
Date and on or before such Interest Payment Date. The Holder must surrender this
Security to a Paying Agent to collect principal payments. The Company will pay
the principal of, premium (if any) on and interest on the Securities in money of
the United States of America that at the time of payment is legal tender for
payment of public and private debts. Such amounts shall be payable at the
offices of the Trustee (as defined below), provided that at the option of the
Company, the Company may pay such amounts (1) by wire transfer with respect to
Global Securities or (2) by check payable in such money mailed to a Holder's
registered address with respect to any Securities.
4. Paying Agent and Registrar. Initially, Bank One, N.A. (the
"Trustee"), the trustee under the Indenture, will act as Paying Agent and
Registrar. In addition, as long as the Securities are listed on the Luxembourg
Stock Exchange, the Company shall maintain a Paying Agent and Registrar for the
Securities in Luxembourg, which initially shall be Kredietbank S.A. Luxembourg.
The Company may change any Paying Agent, Registrar, co-registrar or additional
paying agent without notice to any Holder. The Company, the Guarantor or any
Subsidiary of the Guarantor may act in any such capacity.
5. Indenture. The Company issued the Securities under an Indenture
dated as of October 11, 2001 (the "Indenture") between the Company, the
Guarantor and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S.C. Sections 77aaa-77bbbb) (the "TIA"),
as in effect on the date of execution of the Indenture. The Securities are
subject to all such terms, and Holders are referred to the Indenture and the TIA
for a statement of such terms and for the definitions of capitalized terms used
but not defined herein. The Securities are unsecured general obligations of the
Company limited to $[1,250,000,000] [1,750,000,000] [500,000,000] in aggregate
principal amount [; provided, however, that the authorized aggregate principal
amount of the Securities may be increased before or after the issuance of any
Securities until October 12, [2006] [2026] by a Board Resolution (or action
pursuant to a Board Resolution) to such effect]. The Indenture provides for the
issuance of other series of debt securities (including the Securities, the "Debt
Securities") thereunder.
6. Denominations, Transfer, Exchange. The Securities are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Securities may be registered and Securities may be
exchanged as provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. Neither the Company, the Trustee nor the Registrar shall be
required to register the transfer or exchange of (a) any Security selected for
redemption and repayment in whole or in part, except the unredeemed portion of
any Security being redeemed and repaid in part, or (b) any Security during the
period beginning 15 Business Days before the mailing of notice of redemption of
Securities to be redeemed and repaid and ending at the close of business on the
date of mailing.
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7. Persons Deemed Owners. The registered Holder of a Security shall be
treated as its owner for all purposes.
8. Redemption. The Securities are subject to redemption and repayment,
in whole or in part, at any time and from time to time, at the option of the
Company, upon not less than 30 nor more than 60 days' prior notice as provided
in the Indenture, at a Redemption Price equal to the sum of (i) 100% of the
principal amount of the Securities to be redeemed and repaid and (ii) the
amount, if any, by which the sum of the present values of the Remaining
Scheduled Payments thereon, discounted to the Redemption Date on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate plus [25] [35] [45] basis points, exceeds the principal amount of
the Securities to be redeemed and repaid, plus accrued and unpaid interest
thereon to the Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate
per annum equal to (i) the yield, under the heading which represents the average
for the immediately preceding week, appearing in the most recently published
statistical release designated "H.15(519)" or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System and
which establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue; provided that
if no maturity is within three months before or after the Stated Maturity for
the Securities, yields for the two published maturities most closely
corresponding to the Comparable Treasury Issue will be determined and the
Treasury Rate will be interpolated or extrapolated from such yields on a
straight-line basis rounding to the nearest month; or (ii) if such release (or
any successor release) is not published during the week preceding such
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding such Redemption Date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Securities.
"Independent Investment Banker" means one of the Reference Treasury
Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any Redemption Date,
(i) the average of the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest of such Reference Treasury Dealer
Quotations, or (ii) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation (and its successors), J.P. Morgan Securities Inc. (and its
successors) and Salomon Smith Barney Inc. (and its successors) and one other
nationally recognized investment banking
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firm that is a Primary Treasury Dealer specified from time to time by the
Company; provided, however, that if any of the foregoing shall cease to be a
primary U.S. Government securities dealer (a "Primary Treasury Dealer"), the
Company shall substitute therefor another nationally recognized investment
banking firm that is a Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer as of 3:30 p.m., New
York time, on the third Business Day preceding such Redemption Date.
"Remaining Scheduled Payments" means, with respect to each Security to
be redeemed and repaid, the remaining scheduled payments of the principal
thereof and interest thereon that would be due after the related Redemption Date
but for such redemption and repayment; provided, however, that, if such
Redemption Date is not an Interest Payment Date with respect to such Security,
the amount of the next succeeding scheduled interest payment thereon will be
reduced by the amount of interest accrued thereon to such Redemption Date.
9. Amendments and Waivers. Subject to certain exceptions and
limitations, the Indenture or the Securities may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
then outstanding Debt Securities of all series affected by such amendment or
supplement (acting as one class), and any existing or past Default or Event of
Default under, or compliance with any provision of, the Indenture may be waived
(other than any continuing Default or Event of Default in the payment of the
principal of, premium (if any) on or interest on the Securities) by the Holders
of at least a majority in principal amount of the then outstanding Debt
Securities of any series or of all series (acting as one class) in accordance
with the terms of the Indenture. Without the consent of any Holder, the Company,
the Guarantor and the Trustee may amend or supplement the Indenture or the
Securities or waive any provision of either: (i) to cure any ambiguity,
omission, defect or inconsistency; (ii) to provide for the assumption of (a) the
obligations of the Company under the Indenture to Holders in the case of the
assignment or transfer of the rights and obligations of the Company thereunder
or (b) the obligations of the Guarantor under the Indenture, including the
performance of the Guarantee, in the case of the merger, consolidation or sale,
lease, conveyance, transfer or other disposition of all or substantially all of
the assets of the Guarantor; (iii) to provide for uncertificated Securities in
addition to or in place of certificated Securities or to provide for the
issuance of bearer Securities (with or without coupons); (iv) to provide any
security for, or to add guarantees of, the Securities or the Guarantee; (v) to
comply with any requirement in order to effect or maintain the qualification of
the Indenture under the TIA; (vi) to add to the covenants of the Company or the
Guarantor for the benefit of the Holders of the Securities, or to surrender any
right or power conferred by the Indenture upon the Company or the Guarantor;
(vii) to add any additional Events of Default with respect to all or any series
of the Debt Securities; (viii) to change or eliminate any of the provisions of
the Indenture, provided that no outstanding Security is adversely affected in
any material respect; (ix) to supplement any of the provisions of the Indenture
to such extent as shall be necessary to permit or facilitate the defeasance and
discharge of the Securities pursuant to the Indenture; or (x) to evidence and
provide for the acceptance of appointment under the Indenture by a successor
Trustee with respect to the Securities and to add to or change any of the
provisions of the Indenture as shall be
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necessary to provide for or facilitate the administration of the trusts
thereunder by more than one Trustee, pursuant to the requirements of the
Indenture.
The right of any Holder to participate in any consent required or
sought pursuant to any provision of the Indenture (and the obligation of the
Company or the Guarantor to obtain any such consent otherwise required from such
Holder) may be subject to the requirement that such Holder shall have been the
Holder of record of any Securities with respect to which such consent is
required or sought as of a date identified by the Company or the Guarantor in a
notice furnished to Holders in accordance with the terms of the Indenture.
Without the consent of each Holder affected, the Company may not (i)
reduce the amount of Debt Securities whose Holders must consent to an amendment,
supplement or waiver; (ii) reduce the rate of or change the time for payment of
interest, including default interest, on any Security; (iii) reduce the
principal of or premium on, or change the Stated Maturity of, any Security; (iv)
reduce the premium, if any, payable upon the redemption of any Security or
change the time at which any Security may or shall be redeemed; (v) change the
coin or currency in which any Security or any premium or interest with respect
thereto is payable; (vi) impair the right to institute suit for the enforcement
of any payment of principal of or premium (if any) or interest on any Security,
except as provided in the Indenture; (vii) make any change in the percentage of
principal amount of Debt Securities necessary to waive compliance with certain
provisions of the Indenture or make any change in the provision for
modification; (viii) waive a continuing Default or Event of Default in the
payment of principal of or premium (if any) or interest on the Securities; or
(ix) modify or affect the obligations of the Guarantor under the Guarantee in
any manner adverse to the Holders.
A supplemental indenture that changes or eliminates any covenant or
other provision of the Indenture which has expressly been included solely for
the benefit of one or more particular series of Debt Securities under the
Indenture, or which modifies the rights of the Holders of Debt Securities of
such series with respect to such covenant or other provision, shall be deemed
not to affect the rights under the Indenture of the Holders of Debt Securities
of any other series.
10. Defaults and Remedies. Events of Default are defined in the
Indenture and generally include: (i) default for 30 days in payment of any
interest on the Securities; (ii) default in any payment of principal of or
premium, if any, on the Securities when due and payable; (iii) default by the
Company or the Guarantor in compliance with any of their respective other
covenants or agreements in, or provisions of, the Securities or in the Indenture
which shall not have been remedied within 90 days after written notice by the
Trustee or by the holders of at least 25% in principal amount of the Securities
then outstanding (or, in the event that other Debt Securities issued under the
Indenture are also affected by the default, then 25% in principal amount of all
outstanding Debt Securities so affected); or (iv) certain events involving
bankruptcy, insolvency or reorganization of the Company or the Guarantor. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the then outstanding Securities of the series
affected by such default (or, in the case of an Event of Default described in
clause (iii) above, if outstanding Debt Securities of other series are affected
by such Default, then at least 25% in principal amount of the then outstanding
Debt Securities so affected), may declare the principal of and interest on all
the Securities (or such Debt Securities) to be immediately due and payable,
except that in the case of an Event of
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Default arising from certain events of bankruptcy, insolvency or reorganization
of the Company or the Guarantor, all outstanding Debt Securities under the
Indenture become due and payable immediately without further action or notice.
The amount due and payable upon the acceleration of any Security is equal to
100% of the principal amount thereof plus accrued interest to the date of
payment. Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity reasonably
satisfactory to it before it enforces the Indenture or the Securities. Subject
to certain limitations, Holders of a majority in principal amount of the then
outstanding Securities (or affected Debt Securities) may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing default (except a default in payment of principal, premium or
interest) if it determines that withholding notice is in their interests. The
Company and the Guarantor must furnish annual compliance certificates to the
Trustee.
11. Discharge Prior to Maturity. The Indenture with respect to the
Securities shall be discharged and canceled upon the payment of all of the
Securities and shall be discharged except for certain obligations upon the
irrevocable deposit with the Trustee of funds or U.S. Government Obligations
sufficient for such payment.
12. Trustee Dealings with Company and Guarantor. The Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may make loans to, accept deposits from, and perform services for the
Company, the Guarantor or any of their respective Affiliates, and may otherwise
deal with the Company, the Guarantor or any such Affiliates, as if it were not
Trustee.
13. No Recourse Against Others. A director, officer, employee,
stockholder, partner or other owner of the Company, the Guarantor or the
Trustee, as such, shall not have any liability for any obligations of the
Company under the Securities, for any obligations of the Guarantor under the
Guarantee or for any obligations of the Company, the Guarantor or the Trustee
under the Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting a Security waives
and releases all such liability. The waiver and release shall be part of the
consideration for the issue of Securities.
14. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
15. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Securities as a convenience to the Holders of
the Securities. No representation is made as to the accuracy of such numbers as
printed on the Securities and reliance may be placed only on the other
identification numbers printed thereon.
16. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
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The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:
Conoco Funding Company
c/o Conoco Inc.
600 North Dairy Ashford
Houston, Texas 77079
Telephone: (281) 293-2648
Attention: Capital Markets
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SCHEDULE OF EXCHANGES OF SECURITIES(3)
The following exchanges of a part of this Global Security for other
Securities have been made:
<Table>
<Caption>
Principal Amount
Amount of Amount of of this Global Signature of
Decrease in Increase in Security Following Authorized Officer
Principal Amount Principal Amount Such Decrease of Trustee or
Date of Exchange of this Global Security of this Global Security (or Increase) Security Custodian
----------------- ------------------------ ------------------------ ------------- ------------------
</Table>
-------
(3) This schedule to be included only if the Security is a Global Security.
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ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
as agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
------------------- -------------------------------------
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
------------------------------------------------------------
(Participant in a Recognized Signature
Guaranty Medallion Program)
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