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EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of July 3, 1996 by and among Devon Energy Corporation, an
Oklahoma corporation ("Devon"), Devon Financing Trust, a special purpose
business trust formed under the laws of the State of Delaware (the "Trust"),
and Morgan Stanley & Co. Incorporated (the "Initial Purchaser") pursuant to
the Placement Agreement, dated as of June 27, 1996 (the "Placement Agreement"),
among Devon, the Trust and the Initial Purchaser. In order to induce the
Initial Purchaser to enter into the Placement Agreement, Devon and the Trust
have agreed to provide the registration rights set forth in this Agreement.
The execution of this Agreement is a condition to the closing under the
Placement Agreement.
Devon and the Trust agree with the Initial Purchaser, (i) for
its benefit as Initial Purchaser and (ii) for the benefit of the holders from
time to time of the Registrable Securities (including the Initial Purchaser)
(each of the foregoing a "Holder" and together the "Holders"), as follows:
Section 1. Definitions. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Placement
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
Affiliate: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling or controlled
by, or under direct or direct common control with, such specified person or
(ii) any officer or director of such other person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a person means the possession, direct
or indirect, of the power (whether or not exercised) to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
Applicable Conversion Price: The Applicable Conversion Price
as of any date of determination means the Conversion Price, as may be adjusted
from time to time, in effect as of such date of determination or, if no
Convertible Debentures are then outstanding, the Conversion Price that would be
in effect were Convertible Debentures then outstanding.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to close.
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Common Stock: The shares of common stock, $0.10 par value per
share, of Devon and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.
Conversion Price: Conversion Price shall have the meaning
assigned such term in Section 6.1 of the Indenture.
Convertible Debentures: The 6 1/2% Convertible Junior
Subordinated Debentures of Devon to be purchased by the Trust pursuant to the
Debenture Purchase Agreement dated July 3, 1996 between Devon and the Trust.
Convertible Preferred Securities: the 6 1/2% Trust Convertible
Preferred Securities of the Trust.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each payment date under the Declaration,
in the case of Convertible Preferred Securities, each Interest Payment Date (as
defined in the Indenture), in the case of Convertible Debentures, and each
September 15, December 15, March 15 and June 15, in the case of Underlying
Common Stock.
Declaration: the Amended and Restated Declaration of Trust
dated as of July 3, 1996 of the Trust.
Deferral Period: See Section 2(d)(ii) hereof.
Effectiveness Period: The period commencing with the date
hereof and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
Event: See Section 2(e) hereof.
Event Termination Date: See Section 2(e), hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Guarantee: The guarantee by Devon of the Convertible Preferred
Securities pursuant to the Preferred Securities Guarantee Agreement dated as of
the date hereof.
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Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of July 3, 1996, between
Devon and The Bank of New York, as trustee, pursuant to which the Convertible
Debentures are being issued, as amended by the First Supplemental Indenture
dated July 3, 1996 between Devon and The Bank of New York, as trustee.
Initial Purchaser: Morgan Stanley & Co. Incorporated.
Initial Shelf Registration: See Section 2(a) hereof.
Losses: See Section 6 hereof.
Notice Holder: See Section 2(d)(i) hereof.
Placement Agreement: See the first paragraph of this
Agreement.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Registrable Securities: The Convertible Preferred Securities,
the Guarantee, the Convertible Debentures and the Underlying Common Stock,
whether or not such securities have been converted or exchanged, and at all
times subsequent to any such conversion or exchange, and any security issued
with respect thereto upon any stock dividend, split or similar event until, in
the case of any such security, (i) it is effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering its offering and sale, (ii) it is saleable by the Holder thereof
pursuant to Rule 144(k) or (iii) it is sold to the public pursuant to Rule 144
and, as a result of the event or circumstance described in any of the foregoing
clauses (i) through (iii), the legends with respect to transfer restrictions
required under the Declaration and the Indenture are removed or removable in
accordance with the terms of the Declaration or the Indenture, as the case may
be.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of Devon
or the Trust which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration
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statement, including post-effective amendments, all exhibits, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
Restricted Securities: As this term is defined in Rule 144.
Rule 144: Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Davis Polk & Wardwell or such other
successor counsel as shall be specified by the Holders of a majority of the
Registrable Securities, the fees and expenses of which will be paid by Devon
pursuant to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Bank of New York (or any successor entity), the
Institutional Trustee under the Declaration, or in the event the Convertible
Debentures are distributed to holders of the Convertible Preferred Securities
upon dissolution of the Trust, the Trustee under the Indenture.
Underlying Common Stock: The Common Stock of Devon into which
the Convertible Debentures are convertible.
Section 2. Shelf Registration.
(a) Shelf Registration. Devon and the Trust shall
prepare and file with the SEC, as soon as practicable but in any event within
ninety (90) days after the latest date of original issuance of the Convertible
Preferred Securities (the "Filing Date"), a
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Registration Statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act (a "Shelf Registration")
registering the resale from time to time by Holders thereof of all of the
Registrable Securities (the "Initial Shelf Registration"). The Initial Shelf
Registration shall be on Form S-3 or another appropriate form permitting
registration of such Registrable Securities for resale by such Holders in the
manner or manners designated by them. Devon and the Trust shall use their best
efforts to cause the Initial Shelf Registration to become effective under the
Securities Act as promptly as is practicable and to keep the Initial Shelf
Registration continuously effective under the Securities Act until the end of
the Effectiveness Period.
(b) If the Initial Shelf Registration or any Subsequent
Shelf Registration, as defined below, ceases to be effective for any reason at
any time during the Effectiveness Period (other than because all Registrable
Securities shall have ceased to be Registrable Securities), Devon and the Trust
shall use their best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within thirty (30)
days of such cessation of effectiveness amend the Shelf Registration in a
manner reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration covering all of
the Registrable Securities (a "Subsequent Shelf Registration"). If a
Subsequent Shelf Registration is filed, Devon and the Trust shall use their
best efforts to cause the Subsequent Shelf Registration to become effective as
promptly as is practicable after such filing and to keep such Registration
Statement continuously effective until the end of the Effectiveness Period.
(c) Devon and the Trust shall supplement and amend the
Shelf Registration if required by the rules, regulations or instructions
applicable to the registration form used by Devon and the Trust for such Shelf
Registration, if required by the Securities Act, or if reasonably requested by
the Initial Purchaser or by the Trustee on behalf of the Holders of the
Registrable Securities covered by such Registration Statement.
(d) Each Holder of Registrable Securities agrees that if
such Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related Prospectus, it will do so only in accordance with this
Section 2(d). Each Holder of Registrable Securities agrees to give written
notice to Devon and the Trust at least three (3) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration,
which notice shall specify the date on which such Holder intends to begin such
distribution and any information with respect to such Holder and the intended
distribution of Registrable Securities by such Holder required to amend or
supplement the Registration Statement with respect to such intended
distribution of Registrable Securities by such Holder. As promptly as is
practicable after the date such notice is provided, and in any event within two
(2) Business Days after such date, Devon and the Trust shall either:
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(i) (A) prepare and file with the Commission a
post-effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that, as thereafter
delivered to purchasers of the Registrable Securities being sold thereunder,
such Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; (B) provide the Holders of the Registrable Securities who
gave such notice copies of any documents filed pursuant to Section 2(d)(i)(A);
and (C) inform each such Holder that Devon and the Trust have complied with its
obligations in Section 2(d)(i)(A) (or that, if Devon and the Trust have filed a
post-effective amendment to the Shelf Registration which has not yet been
declared effective, Devon and the Trust will notify each such Holder to that
effect, will use their best efforts to secure the effectiveness of such
post-effective amendment and will immediately notify each such Holder pursuant
to Section 2(d)(i)(A) hereof when the amendment has become effective); each
Holder who has given notice of intention to distribute such Holder's
Registrable Securities in accordance with Section 2(d) hereof (a "Notice
Holder") will sell all or any or such Registrable Securities pursuant to the
Shelf Registration and related Prospectus only during the 45-day period
commencing with the date on which Devon and the Trust gives notice, pursuant to
Section 2(d)(i)(A), that the Registration Statement and Prospectus may be used
for such purpose (such 45-day period is referred to as a "Selling Period"); the
Notice Holders will not sell any Restricted Securities pursuant to such
Registration Statement or Prospectus after such Selling Period without giving a
new notice of intention to sell pursuant to Section 2(d) hereof and receiving a
further notice from Devon and the Trust pursuant to Section 2(d)(i)(A) hereof;
or
(ii) in the event (A) of the happening of any
event of the kind described in Section 2(e)(ii), 2(e)(iii) or 2(e)(iv) hereof
or (B) that, in the judgment of Devon, it is advisable to suspend use of the
Prospectus for a discrete period of time due to pending material corporate
developments or similar material events that have not yet been publicly
disclosed and as to which Devon believes public disclosure will be prejudicial
to Devon or the Trust, Devon shall deliver a certificate in writing, signed by
its Chief Executive Officer or Chief Financial Officer, to the Notice Holders
and the Special Counsel to the effect of the foregoing and, upon receipt of
such certificate, each such Notice Holder's Selling Period will not commence
until such Notice Holder's receipt of copies of the supplemented or amended
Prospectus provided for in Section 2(d)(i)(A) hereof, or until it is advised in
writing by Devon and the Trust that the Prospectus may be used, and has
received copies of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in such Prospectus. Devon and the Trust
will use their best efforts to ensure that the use of the Prospectus may be
resumed,
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and the Selling Period will commence, as promptly as is practicable and, in the
case of a pending development or event referred to in Section 2(d)(ii)(B)
hereof, as soon as the earlier of (x) public disclosure of such pending
material corporate development or similar material event or (y) in the judgment
of Devon, public disclosure of such material corporate development or similar
material event would not be prejudicial to Devon or the Trust. Notwithstanding
the foregoing, Devon and the Trust shall not under any circumstances be
entitled to exercise their right under this Section 2(d)(ii) to defer the
commencement of a Selling Period more than one (1) time in any three (3) month
period or two (2) times in any twelve (12) month period, and the period during
which a Selling Period is suspended shall not exceed thirty (30) days unless
Devon and the Trust shall deliver to such Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the period
during which such Selling Period is deferred by up to an additional thirty (30)
days, or such shorter period of time as is specified in such second notice;
provided that the period during which a Selling Period is deferred, a "Deferred
Period," shall not exceed sixty (60) days in any twelve (12) month period.
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration has not
been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, (iii) the aggregate number of days in any one Deferral Period exceeds the
number permitted pursuant to Section 2(d)(ii) hereof or (iv) the number of
Deferral Periods exceeds the number permitted pursuant to Section 2(d)(ii)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (iv) are individually referred to herein as an "Event," and the
Filing Date in the case of clause (i), the date on which the effectiveness of
the Shelf Registration has been suspended or proceedings with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (ii), the date on which the duration of a
Deferral Period exceeds the number of days permitted by Section 2(d)(ii) hereof
in the case of clause (iii), and the date of the commencement of a Deferral
Period that causes the limit on the number of Deferral Periods under Section
2(d)(ii) hereof to be exceeded in the case of clause (iv), being referred to
herein as an "Event Date"). Events shall be deemed to continue until the
"Event Termination Date," which shall be the following dates with respect to
the respective types of Events: the date the Initial Registration Statement is
filed in the case of an Event of the type described in clause (i), the date
that all stop orders suspending effectiveness of the Shelf Registration have
been removed and the proceedings initiated with respect to the Shelf
Registration under Section 8(d) or (e) of the Securities Act have terminated,
as the case may be, in the case of Events of the types described in clause
(ii), termination of the Deferral Period which caused the limit on the duration
of a Deferred Period set forth in Section 2(d)(ii) to be exceeded in the case
of the commencment of an Event of the type described in clause (iii), and
termination of the
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Deferral Period the commencement of which caused the number of Deferral Periods
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iv).
Accordingly, upon the occurrence of any Event and until such
time as there are no Events that have occurred and are continuing (a "Damages
Accrual Period"), commencing on the Event Date on which such Damages Accrual
Period began, Devon agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages Amount"): (A) (i) to each Holder
of (x) a Convertible Preferred Security or (y) in the event that the
Convertible Debentures are distributed to holders of Convertible Preferred
Securities upon dissolution of the Trust in accordance with the Declaration, a
Convertible Debenture (in each case that is a Notice Holder), accruing at a
rate equal to one-quarter of one percent per annum (25 basis points) on an
amount equal to the liquidation amount of such Convertible Preferred Security
or principal amount of such Convertible Debenture, as the case may be, held by
such Notice Holder and (ii) to each Holder of Underlying Common Stock that is
a Notice Holder, accruing at a rate equal to one-quarter of one percent per
annum (25 basis points) calculated on an amount equal to the product of (x) the
Applicable Conversion Price as of the Business Day immediately prior to the
applicable Damages Payment Date times (y) the number of shares of Common Stock
that are Registrable Securities held by such Notice Holder; and (B) if the
Damages Accrual Period continues for in excess of thirty (30) days, from and
after the end of such thirty (30) day period until the applicable Event
Termination Date, (i) to each Holder of a (x) Convertible Preferred Security or
(y) in the event that the Convertible Debentures are distributed to holders of
Convertible Preferred Securities upon dissolution of the Trust in accordance
with the Declaration, a Convertible Debenture (in each case whether or not a
Notice Holder), accruing at a rate equal to one-quarter of one percent per
annum (25 basis points) on an amount equal to the liquidation amount of such
Convertible Preferred Security or principal amount of such Convertible
Debenture, as the case may be, held by such Holder and (ii) to each Holder of
Underlying Common Stock (whether or not a Notice Holder), accruing at a rate
equal to one-quarter of one percent per annum (25 basis points) calculated on
an amount equal to the product of (x) the Applicable Conversion Price as of the
Business Day immediately prior to the applicable Damages Payment Date times
(y) the number of shares of Common Stock that are Registrable Securities held
by such Holder. Notwithstanding the foregoing, no Liquidated Damages Amounts
shall accrue (1) under clause (A) of the preceding sentence during any period
for which Liquidated Damages Amounts accrue under clause (B) of the foregoing
sentence as to any Registrable Security from and after the earlier of (x) the
date such security is no longer a Registrable Security, and (y) expiration of
the Effectiveness Period. Notwithstanding the foregoing, no Damages Accrual
Period with respect to any Event described in clause (ii) of paragraph 2(e)
shall commence unless and until a Holder or Holders has given notice in
accordance with Section 2(d) hereof. The rate of accrual of the Liquidated
Damages Amount with respect to any period shall not exceed the rate
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provided for in this paragraph notwithstanding the occurrence of multiple
concurrent Events.
Devon shall pay the liquidated damages due on any Convertible
Preferred Security, Convertible Debenture or Underlying Common Stock by
depositing with the Trustee, in trust for the benefit of the Holders of
Convertible Preferred Securities, Convertible Debentures or Underlying Common
Stock, as the case may be, entitled thereto, at least one (1) Business Day
prior to the applicable Damages Payment Date, sums sufficient to pay the
liquidated damages accrued or accruing from and including the last preceding
Damages Payment Date to, but not including, such Damages Payment Date. The
Liquidated Damages Amount due shall be payable on each Damages Payment Date to
the Holders of Registrable Securities entitled thereto holding such Registrable
Securities on the record date for such Damages Payment Date; provided that
accrued Liquidated Damages Amounts shall be paid on the applicable redemption
date upon the redemption of any Convertible Debenture or Convertible Preferred
Security (to the extent accrued with respect to such Convertible Debenture or
Convertible Preferred Security). The Trustee shall be entitled, on behalf of
the Notice Holders and the Holders of Convertible Preferred Securities,
Convertible Debentures or Underlying Common Stock, to seek any available remedy
for the enforcement of this Agreement, including for the payment of such
liquidated damages. Notwithstanding the foregoing, the parties agree that the
sole damages payable for a violation of the terms of this Agreement with
respect to which liquidated damages are expressly provided shall be such
liquidated damages. Nothing shall preclude a Notice Holder or Holder of
Registrable Securities from pursuing or obtaining specific performance or other
equitable relief with respect to this Agreement.
All of Devon's obligations set forth in this Section 2(e)
which are outstanding with respect to any Registrable Security at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 9(o)).
The parties hereto agree that the liquidated damages provided
for in this Section 2(e) constitute a reasonable estimate of the damages that
may be incurred by Holders of Registrable Securities (other than the Initial
Purchaser) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities in accordance with the provisions
hereof.
Section 3. Registration Procedures. In connection with the
registration obligations of Devon and the Trust under Section 2 hereof, Devon
and the Trust shall effect such registrations to permit the sale of the
Registrable Securities in accordance with the intended method or methods of
disposition thereof, and pursuant thereto Devon and the Trust shall as
expeditiously as possible:
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(a) Prepare and file with the SEC a Registration
Statement on any appropriate form under the Securities Act available for the
sale of the Registrable Securities by the Holders thereof in accordance with
the intended method or methods of distribution thereof, and use their best
efforts to cause each such Registration Statement to become effective and
remain effective as provided herein; provided, that before filing any such
Registration Statement or Prospectus or any amendments or supplements thereto
(other than documents that would be incorporated or deemed to be incorporated
therein by reference and that Devon or the Trust is required by applicable
securities laws or stock exchange requirements to file) Devon and the Trust
shall furnish to the Initial Purchaser and the Special Counsel of such
offering, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of the Initial Purchaser and the
Special Counsel, and Devon and the Trust shall not file any such Registration
Statement or amendment thereto or any Prospectus or any supplement thereto
(other than such documents which, upon filing, would be incorporated or deemed
to be incorporated by reference therein and that Devon or the Trust is required
by applicable securities laws or stock exchange requirements to file) to which
the Initial Purchaser or the Special Counsel shall reasonably object in writing
within two (2) full Business Days.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
as so amended or such Prospectus as so supplemented.
(c) Promptly notify the Notice Holders, and, following
the giving of notice pursuant to Section 2(d), the Initial Purchaser and the
Special Counsel promptly, and (if requested by any such person) confirm such
notice in writing, (i) when a Prospectus, any Prospectus supplement, a
Registration Statement or a post-effective amendment to a Registration
Statement has been filed with the SEC, and, with respect to a Registration
Statement or any post-effective amendment, when the same has become effective,
(ii) of any request by the SEC or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation or threatening
of any proceedings for that purpose, (iv) of the receipt by Devon or the Trust
of any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose,
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(v) of the existence of any fact or happening of any event which makes any
statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case
of the Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and (vi) of
the determination by Devon that a post-effective amendment to a Registration
Statement would be appropriate.
(d) Use its best efforts to obtain the withdrawal of any
order suspending the effectiveness of a Registration Statement, or the lifting
of any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment.
(e) If reasonably requested by the Initial Purchaser, the
Special Counsel, or the Holders of a majority of the Registrable Securities
being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchaser, the Special Counsel, or such Holders, in connection with any
offering of Registrable Securities, agree should be included therein as
required by applicable law, and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as promptly as is
practicable after Devon and the Trust have received notification of the matters
to be incorporated in such Prospectus supplement or post-effective amendment;
provided, that Devon and the Trust shall not be required to take any actions
under this Section 3(e) that are not, in the reasonable opinion of counsel for
Devon, in compliance with applicable law.
(f) Furnish to each selling Holder, the Special Counsel
and the Initial Purchaser, without charge, at least one (1) conformed copy of
the Registration Statement and any amendment thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
by such Holder, counsel or Initial Purchaser).
(g) Deliver to each selling Holder, the Special Counsel
and the Initial Purchaser in connection with any offering of Registrable
Securities, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such persons may reasonably request;
and Devon and the Trust hereby consent to the use of such Prospectus or each
amendment or supplement thereto by each of the selling Holders
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of Registrable Securities in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable
Securities, to register or qualify or cooperate with the selling Holders and
the Special Counsel in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder reasonably
requests in writing; keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is required
to be kept effective and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by the applicable Registration Statement; provided, that
neither Devon nor the Trust will be required to (i) qualify generally to do
business in any jurisdiction where it is not then so qualified or (ii) take any
action that would subject it to general service of process in suits or to
taxation in any such jurisdiction where it is not then so subject.
(i) Cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States (except as
may be required solely as a consequence of the nature of such selling Holder,
in which case Devon and the Trust will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals) as may be necessary to enable the selling Holder or Holders thereof
to consummate the disposition of such Registrable Securities.
(j) During any Selling Period (other than during a
Deferral Period), immediately upon the existence of any fact or the occurrence
of any event as a result of which a Registration Statement shall contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading, or a Prospectus shall contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, promptly prepare and file a post-
effective amendment to each Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file
any other required document (such as a Current Report on Form 8-K) that would
be incorporated by reference into the Registration Statement so that the
Registration Statement shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that the
Prospectus will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-
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effective amendment to a Registration Statement, use their best efforts to
cause it to become effective as promptly as is practicable.
(k) Enter into such agreements and take all such other
actions in connection therewith in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection (i) make such
representations and warranties, subject to the ability of Devon and the Trust
to do so, to the Holders of such Registrable Securities with respect to the
business of Devon and its subsidiaries and the Trust, the Registration
Statement, Prospectus and documents incorporated by reference or deemed
incorporated by reference, if any, in each case, in form, substance and scope
as shall be reasonably satisfactory to the Special Counsel and the Holders of a
majority of the Registered Securities being sold, and (ii) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold and the Special Counsel to
evidence the continued validity of the representations and warranties of Devon
and its subsidiaries and the Trust made pursuant to clause (i) above. The plan
of distribution of the Registration Statement and the Prospectus included
therein shall permit resales of Registrable Securities to be made by selling
securityholders through brokers and dealers. However, neither Devon nor the
Trust will be obligated hereunder to pay the costs and expenses of opinions of
counsel of such selling securityholders, or accountants' "cold comfort" letters
and neither the officers and directors of Devon nor the trustees of the Trust
will be obligated hereunder to participate in marketing efforts on behalf of
such selling securityholders.
(l) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available for
inspection by a representative of the Holders of Registrable Securities being
sold, and any Special Counsel or accountant retained by such selling Holders,
financial and other records, pertinent corporate documents and properties of
Devon and the Trust and its subsidiaries, and cause the executive officers,
directors and employees of the Company and its subsidiaries to supply all
information reasonably requested by any such representative, Special Counsel or
accountant in connection with such disposition; subject to reasonable
assurances by each such person that such information will only be used in
connection with matter relating to such Registration Statement.
(m) Comply with all applicable rules and regulations of
the SEC and make generally available to its securityholders earning statements
(which need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated under
the Securities Act) no later than 45 days after the end of any 12-month period
(or 90 days after the end of any 12-month period if such period is a fiscal
year) commencing on the first day of the first fiscal quarter of Devon
commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
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(n) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as the Holders may request.
(o) Provide a CUSIP number for all Registrable Securities
not later than the effective date of the Registration Statement and provide the
Trustee and the transfer agent for the Common Stock with printed certificates
for the Registrable Securities which are in a form eligible for deposit with
the Depositary Trust Company.
(p) Cause all Underlying Common Stock covered by the
Registration Statement to be listed on each securities exchange or quotation
system on which Devon's Common Stock is then listed no later than the date the
Registration Statement is declared effective and, in connection therewith, to
the extent applicable, to make such filings under the Exchange Act (e.g., the
filing of a Registration Statement on Form 8-A) and to have such filings
declared effective thereunder.
(q) Cooperate and assist in any filings required to be
made with the National Association of Securities Dealers, Inc.
Section 4. Holder's Obligations. Each Holder agrees, by
acquisition of the Registrable Securities, that no Holder of Registrable
Securities shall be entitled to sell any of such Registrable Securities
pursuant to a Registration Statement or to receive a Prospectus relating
thereto, unless such Holder has furnished Devon and the Trust with the notice
required pursuant to Section 2(d) hereof (including the information required to
accompany such notice) and, promptly after the request by Devon and the Trust,
such other information regarding such Holder and the distribution of such
Registrable Securities as Devon and the Trust may from time to time reasonably
request. Devon and the Trust may exclude from such registration the
Registrable Securities of any Holder who does not furnish such information
provided above for so long as such information is not so furnished. Each
Holder of Registrable Securities as to which any Registration Statement is
being effected agrees promptly to furnish to Devon and the Trust all
information required to be disclosed in order to make the information
previously furnished to Devon and the Trust by such Holder not misleading. Any
sale of any Registrable Securities by any Holder shall constitute a
representation and warranty by such Holder that the information relating to
such Holder and its plan of distribution is as set forth in the Prospectus
delivered by such Holder in connection with such disposition, that such
Prospectus does not as of the time of such sale contain any untrue statement of
a material fact relating to such Holder or its plan of distribution and that
such Prospectus does not as of the time of such sale omit to state any material
fact relating to such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.
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Section 5. Registration Expenses. Subject to Section 3(k)
hereof, all fees and expenses incident to the performance by Devon and the
Trust of or compliance with this Agreement shall be borne by Devon whether or
not any of the Registration Statements become effective. Such fees and
expenses shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the National Association of Securities
Dealers, Inc. and (y) of compliance with federal and state securities or Blue
Sky laws (including, without limitation, fees and disbursements of Special
Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Holders of a majority of
the Registrable Securities being sold may designate), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depositary Trust
Company and of printing prospectuses if the printing of prospectuses is
requested by the Special Counsel or the Holders of a majority of the
Registrable Securities included in any Registration Statement), (iii)
messenger, telephone and delivery expenses, (iv) reasonable fees and
disbursements of counsel for Devon and the Trust and the Special Counsel in
connection with the Shelf Registration (provided that Devon shall not be liable
for the fees and expenses of more than one separate firm for all parties
participating in any transaction hereunder), and (v) Securities Act liability
insurance obtained by Devon in its sole discretion. In addition, Devon shall
pay the internal expenses of Devon and the Trust (including, without
limitation, all salaries and expenses of officers and employees performing
legal or accounting duties), the expense of any annual audit, the fees and
expenses incurred in connection with the listing of the Underlying Common Stock
and the fees and expenses of any person, including special experts, retained by
Devon or the Trust. Notwithstanding the provisions of this Section 5, each
seller of Registrable Securities shall pay all registration expenses to the
extent Devon is prohibited by applicable Blue Sky laws from paying for or on
behalf of such seller of Registrable Securities.
Section 6. Indemnification.
(a) Indemnification by Devon. Devon shall indemnify and
hold harmless each Holder and each person, if any, who controls any Holder
(within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act) from and against all losses, liabilities, claims, damages and
expenses (including, without limitation, any legal or other expenses reasonably
incurred in connection with defending or investigating any such action or
claim) (collectively, "Losses"), arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such Losses arise out of or based upon the information relating to
any Holder furnished to Devon in writing by such Holder expressly for use
therein; provided, that Devon shall not be liable to any Holder of
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Registrable Securities (or any person controlling such Holder) to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if either (A) (i) such Holder failed to send or deliver
a copy of the Prospectus with or prior to the delivery of written confirmation
of the sale by such Holder to the person asserting the claim from which such
Losses arise and (ii) the Prospectus would have corrected such untrue statement
or alleged untrue statement or such omission or alleged omission, or (B) (x)
such untrue statement or alleged untrue statement, omission or alleged omission
is corrected in an amendment or supplement to the Prospectus and (y) having
previously been furnished by or on behalf of Devon or the Trust with copies of
the Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, with or prior to the
delivery of written confirmation of the sale of a Registrable Security to the
person asserting the claim from which such Losses arise. Devon shall also
indemnify each broker-dealer participating in the offering and sale of
Registrable Securities and each person who controls such person (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
to the same extent and with the same limitations as provided above with respect
to the indemnification of the Holders of Registrable Securities.
(b) Indemnification by Holder of Registrable Securities.
Each Holder agrees severally and not jointly to indemnify and hold harmless
Devon and the Trust, Devon's directors, Devon's officers who sign a
Registration Statement, the trustees of the Trust, and each person, if any, who
controls Devon or the Trust (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act), from and against all losses
arising out of or based upon any untrue statement of a material fact contained
in any Registration Statement, Prospectus or preliminary prospectus or arising
out of or based upon any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in any information relating to such Holder so furnished in writing by
such Holder to Devon and the Trust expressly for use in such Registration
Statement or Prospectus. In no event shall the liability of any selling Holder
of Registrable Securities hereunder be greater in amount than the dollar amount
of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
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disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for (a) the fees and expenses of more than one
separate firm (in addition to any local counsel) for all Holders and all
persons, if any, who control any Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, and (b) the fees and
expenses of more than one separate firm (in addition to any local counsel) for
Devon and the Trust, Devon's directors, Devon's officers who sign a
Registration Statement, the trustees of the Trust and each person, if any, who
controls Devon or the Trust within the meaning of either such Section, and that
all such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for Devon and the Trust, and such directors,
officers, trustees and control persons of Devon or the Trust, such firm shall
be designated in writing by Devon. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) Contribution. To the extent that the indemnification
provided for in this Section 6 is unavailable to an indemnified party under
Section 6(a) or 6(b) hereof in respect of any Losses or is insufficient to hold
such indemnified party harmless, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such Losses, (i) in
such proportion as is appropriate to reflect the relative benefits received by
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the indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the indemnifying party or parties on the one hand
and of the indemnified party or parties on the other hand in connection with
the statements or omissions that resulted in such Losses, as well as any other
relevant equitable considerations. Benefits received by Devon and the Trust
shall be deemed to be equal to the total net proceeds from the initial
placement (before deducting expenses) of the Convertible Preferred Securities
pursuant to the Placement Agreement. Benefits received by any Holder shall be
deemed to be equal to the value of receiving Registrable Securities that are
registered under the Securities Act. The relative fault of the Holders on the
one hand and Devon and the Trust on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Holders or by Devon or the
Trust and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this paragraph are several in
proportion to the respective number of Registrable Securities they have sold
pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation or by any other method or allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of
the Losses referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding this
Section 6(d), an indemnifying party that is a selling Holder of Registrable
Securities shall not be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities sold by
such indemnifying party and distributed to the public were offered to the
public exceeds the amount of any damages which such indemnifying party has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement
obligations of Devon and the Trust hereunder shall be in addition to any
liability Devon or the Trust may otherwise have hereunder, under the Placement
Agreement or otherwise. The provisions of this Section 6 shall survive,
notwithstanding any transfer of the Registrable Securities by any Holder or any
termination of this Agreement.
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The indemnity and contribution provisions contained in this
Section 6 shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Holder or any person controlling any Holder, or Devon or the Trust,
Devon's officers or Devon's directors or the trustees of the Trust or any
person controlling Devon or the Trust and (iii) the sale of any Registrable
Securities by any Holder.
Section 7. Information Requirements.
(a) Devon and the Trust shall file the reports required
to be filed by it under the Securities Act and the Exchange Act, and if at any
time Devon or the Trust is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales of Registrable Securities
pursuant to Rule 144 and Rule 144A under the Securities Act. Devon and the
Trust further covenant that they will cooperate with any Holder of Registrable
Securities and take such further reasonable action as any Holder of Registrable
Securities may reasonably request (including, without limitation, making such
reasonable representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 and Rule 144A under the Securities Act.
Upon the request of any Holder of Registrable Securities, each of Devon and the
Trust shall deliver to such Holder a written statement as to whether it has
complied with such filing requirements. Notwithstanding the foregoing, nothing
in this Section 7 shall be deemed to require Devon or the Trust to register any
of its securities (other than the Common Stock) under any section of the
Exchange Act.
(b) Devon and the Trust shall file the reports required
to be filed by it under the Exchange Act and shall comply with all other
requirements set forth in the instructions to Form S-3 in order to allow it to
be eligible to file registration statements on Form S-3.
Section 8. Submission to Jurisdiction. Devon and the Trust
irrevocably consent and agree, for the benefit of the Holders, that any legal
action, suit or proceeding against it with respect to its obligations,
liabilities or any other matter arising out of or in connection with this
Agreement may be brought in the courts of the State of New York or the courts
of the United States located in The City of New York and hereby irrevocably
consents and submits to the non-exclusive jurisdiction of each such court in
personam, generally and unconditionally, with respect to any such action, suit
or proceeding for itself and in respect of its properties, assets and revenues.
Each of Devon and the Trust has irrevocably designated, appointed and
empowered C T Corporation System, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and its properties,
assets and revenues,
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service of any and all legal process, summons, notices and documents which may
be served in any such action, suit or proceeding referred to in the preceding
paragraph of this Section 8 brought in any United States or State court that
may be made on such designee, appointee and agent in accordance with legal
procedures prescribed for such courts. Said designation and appointment shall
be irrevocable until the end of the Effectiveness Period, provided, however,
that if for any reason such designee, appointee and agent hereunder shall cease
to be available to act as such, Devon and the Trust agrees to designate a new
designee, appointee and agent in The City of New York on the terms and for the
purposes of this Section 8 satisfactory to the Initial Purchaser. Each of
Devon and the Trust further hereby irrevocably consents and agrees to the
service of any and all legal process, summons, notices and documents out of any
of the aforesaid courts in any such action, suit, or proceeding by serving a
copy thereof upon the relevant agent for service of process referred to in this
Section 8 (whether or not the appointment of such agent shall for any reason
prove to be ineffective or such agent shall accept or acknowledge such service)
or by mailing copies thereof by registered or certified air mail, postage
prepaid, to each of Devon and the Trust at its address specified in or
designated pursuant to Section 9 of this Agreement. The Company agrees that
the failure of such designee, appointee and agent to give any notice of such
service to it shall not impair or affect in any way the validity of such
service or any judgment rendered in any action or proceeding based thereon.
Nothing herein shall in any way be deemed to limit the ability of the Notice
Holders or the Holders of the Registrable Securities, to serve any such legal
process, summons, notices and documents in any other manner permitted by
applicable law or to obtain jurisdiction over Devon or the Trust or bring
actions, suits or proceedings against Devon or the Trust in such other
jurisdictions, and in such manner, as may be permitted by applicable law. Each
of Devon and the Trust hereby irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection which it may now, or until the
end of the Effectiveness Period, have to the laying of venue or any of the
aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement brought in the United States Federal courts located in The City
of New York or the courts of the State of New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
The provisions of this Section 8 shall survive any termination of this
Agreement, in whole or in part.
Section 9. Miscellaneous.
(a) Remedies. In the event of a breach by Devon or the
Trust of its obligations under this Agreement, each Holder of Registrable
Securities, in addition to being entitled to exercise all rights granted by
law, including recovery of damages, will be entitled to specific performance of
its rights under this Agreement, provided, that the sole damages payable for a
violation of the terms of this Agreement for which liquidated
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damages are expressly provided pursuant to Section 2(e) hereof shall be such
liquidated damages. Each of Devon and the Trust agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of any of the provisions of this Agreement and hereby further agrees
that, in the event of any action for specific performance in respect of such
breach, it shall waive the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. Neither Devon nor the
Trust has, as of the date hereof, nor shall, on or after the date of this
Agreement, enter into any agreement with respect to its securities which
conflicts with the rights granted to the Holders of Registrable Securities in
this Agreement. Each of Devon and the Trust represents and warrants that the
rights granted to the Holders of Registrable Securities hereunder do not in any
way conflict with the rights granted to the Holders of the Devon's or the
Trust's securities under any other agreements.
(c) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless Devon and the Trust have obtained
the written consent of Holders of a majority of the then outstanding Underlying
Common Stock constituting Registrable Securities (with Holders of Convertible
Preferred Securities deemed to be the Holders, for purposes of this Section,
of the number of outstanding shares of Underlying Common Stock into which such
Debentures are convertible or exchangeable). Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Registrable Securities
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders; provided, that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing and shall be
deemed given (i) when made, if made by hand delivery, (ii) upon confirmation,
if made by telecopier or (iii) one (1) business day after being deposited with
a reputable next-day courier, postage prepaid, to the parties as follows
(provided that with respect to any notice of intention to sell given by a
Holder to Devon and the Trust pursuant to Section 2(d) hereof in accordance
with this Section 9(d) which is given on or after December 24 of any year and
on or prior to January 1 of the next year, such notice shall only be deemed
given upon the earlier of actual receipt of such notice by Devon and the Trust
or the first Business Day next succeeding such January 1):
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(w) if to a Holder of Registrable Securities, at
the most current address given by such Holder to Devon and the
Trust in accordance with the provisions of Section 9(e);
(x) if to Devon, to:
Devon Energy Corporation
20 North Broadway
Suite 1500
Oklahoma City, Oklahoma 73102-8260
Attention: Marian Moon
Telecopy No.: (405) 552-4550
(y) if to the Trust, to:
Devon Financing Trust
c/o Devon Energy Corporation
20 North Broadway
Suite 1500
Oklahoma City, Oklahoma 73102-8260
Attention: Marian Moon
Telecopy No.: (405) 552-4550
; and
(z) if to the Special Counsel, to:
Davis Polk & Wardwell
450 Lexington
New York, New York
Attention: John M. Brandow
Telecopy No.: (212) 450-4800
or to such other address as such person may have furnished to
the other persons identified in this Section 9(d) in writing
in accordance herewith.
(e) Owner of Registrable Securities. Devon and the Trust
will maintain, or will cause its registrar and transfer agent to maintain, a
register with respect to the Registrable Securities in which all transfers of
Registrable Securities of which the Company has received notice will be
recorded. Devon and the Trust may deem and treat the person in whose name
Registrable Securities are registered in such register of Devon and the Trust
as the owner thereof for all purposes, including, without limitation, the
giving of notices under this Agreement.
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(f) Approval of Holders. Whenever the consent or
approval of Holders of a specified percentage of Registrable Securities is
required hereunder, Registrable Securities held by Devon, the Trust or their
respective affiliates (as such term is defined in Rule 405 under the Securities
Act) (other than the Initial Purchaser or subsequent Holders of Registrable
Securities if such subsequent Holders are deemed to be such affiliates solely
by reason of their holdings of such Registrable Securities) shall not be
counted in determining whether such consent or approval was given by the
Holders of such required percentage.
(g) Successors and Assigns. Any person who purchases any
Registrable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial Purchaser. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties and shall inure to the benefit of and be binding upon each
Holder of any Registrable Securities.
(h) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be original and all of which taken
together shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. THIS AGREEMENT 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.
(k) Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby, and the parties hereto
shall use their best efforts to find and employ an alternative means to achieve
the same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and the
registration rights granted by Devon and the Trust
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with respect to the Registrable Securities sold pursuant to the Placement
Agreement. Except as provided in the Placement Agreement, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Registrable Securities. This Agreement supersedes
all prior agreements and undertakings among the parties with respect to such
registration rights.
(m) Attorneys' Fees. In any action or proceeding brought
to enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the
court, shall be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(n) Further Assurances. Each of the parties hereto shall
use all reasonable efforts to take, or cause to be taken, all appropriate
action, do or cause to be done all things reasonably necessary, proper or
advisable under applicable law, and execute and deliver such documents and
other papers, as may be required to carry out the provisions of this Agreement
and the other documents contemplated hereby and consummate and make effective
the transactions contemplated hereby.
(o) Termination. This Agreement and the obligations of
the parties hereunder shall terminate upon the end of the Effectiveness Period,
except for any liabilities or obligations under Sections 4, 5 or 6 hereof and
the obligations to make payments of and provide for liquidated damages under
Section 2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
DEVON ENERGY CORPORATION
By: /s/ J. LARRY NICHOLS
---------------------------------------
Name: J. Larry Nichols
Title: President & CEO
DEVON FINANCING TRUST
By: /s/ J. LARRY NICHOLS
---------------------------------------
Name: J. Larry Nichols
Title: Regular Trustee
Solely as trustee and not in his
individual capacity
Accepted as of the date first
above written,
MORGAN STANLEY & CO. INCORPORATED
By: /s/ CANDICE KOEDERITZ
-------------------------------
Name: Candice Koederitz
Title: Managing Director