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EXHIBIT 1.3
CONOCO FUNDING COMPANY
DEBT SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY CONOCO INC.
UNDERWRITING AGREEMENT
1. Introductory. Conoco Inc., a Delaware corporation ("CONOCO"), and
Conoco Funding Company, an unlimited liability company incorporated under the
laws of Nova Scotia, Canada and a wholly owned subsidiary of Conoco ("Conoco
Funding"; Conoco Funding, together with Conoco jointly and severally, being
hereafter called the "Company") propose that Conoco Funding will issue and sell
from time to time certain of its unsecured debt securities fully and
unconditionally guaranteed by Conoco registered under the registration statement
referred to in Section 2(a) (such securities, including the guarantee relating
thereto by Conoco (the "Guarantee"), being hereinafter called the "REGISTERED
SECURITIES"). The Registered Securities will be issued under an indenture, to be
dated as of October 11, 2001 ("INDENTURE"), among Conoco, Conoco Funding and
Bank One, N.A., as Trustee, in one or more series, which series may vary as to
interest rates, maturities, redemption provisions, selling prices and other
terms, with all such terms for any particular series of the Registered
Securities being determined at the time of sale. Particular series of the
Registered Securities will be sold pursuant to a Terms Agreement referred to in
Section 3, for resale in accordance with terms of offering determined at the
time of sale.
The Registered Securities involved in any such offering are hereinafter
referred to as the "OFFERED SECURITIES". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"UNDERWRITERS" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "REPRESENTATIVES"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company. The Company, as of
the date of each Terms Agreement referred to in Section 3, represents and
warrants to, and agrees with, each Underwriter that:
(a) A registration statement (Nos. 333-69198 and
333-69198-01), including a prospectus, relating to the Registered
Securities has been filed with the Securities and Exchange Commission
("COMMISSION") and has become effective. Such registration statement,
as amended at the time of any Terms Agreement referred to in Section 3
and including any documents incorporated by reference, is hereinafter
referred to as the "REGISTRATION STATEMENT", and the prospectus
included in such Registration Statement, as supplemented as
contemplated by Section 3 to reflect the terms of the Offered
Securities and the terms of offering thereof, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE
424(b)") under the Securities Act of 1933 ("ACT"), including all
material incorporated by reference therein, is hereinafter
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referred to as the "PROSPECTUS". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) On the effective date of the registration statement
relating to the Registered Securities, such registration statement
conformed in all respects to the requirements of the Act, the Trust
Indenture Act of 1939 ("TRUST INDENTURE ACT") and the rules and
regulations of the Commission ("RULES AND REGULATIONS") and did not
include 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 on the date of each Terms
Agreement referred to in Section 3, the Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act,
the Trust Indenture Act and the Rules and Regulations, and neither of
such documents will include 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, except that
the foregoing does not apply to statements in or omissions from any of
such documents based upon written information furnished to the Company
by any Underwriter through the Representatives, if any, specifically
for use therein.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("TERMS AGREEMENT") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount of the
Offered Securities to be purchased by each Underwriter, the commission or fee to
be paid to the Underwriters and the terms of the Offered Securities not already
specified in the Indenture, including, but not limited to, interest rate,
maturity, any redemption provisions and any sinking fund requirements. The Terms
Agreement will also specify the time and date of delivery and payment (such time
and date, or such other time not later than seven full business days thereafter
as the Representatives and the Company agree as the time for payment and
delivery, being herein and in the Terms Agreement referred to as the "CLOSING
DATE"), the place of delivery and payment and any details of the terms of
offering that should be reflected in the prospectus supplement relating to the
offering of the Offered Securities. For purposes of Rule 15c6-1 under the
Securities Exchange Act of 1934, the Closing Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Offered Securities sold pursuant to the offering. The
obligations of the Underwriters to purchase the Offered Securities will be
several and not joint. It is understood that the Underwriters propose to offer
the Offered Securities for sale as set forth in the Prospectus.
If the Terms Agreement specifies "Book-Entry Only" settlement or
otherwise states that the provisions of this paragraph shall apply, Conoco
Funding will deliver against payment of the cash purchase price the Offered
Securities in the form of one or more permanent global securities in definitive
form (the "GLOBAL SECURITIES") deposited with the Trustee as custodian for The
Depository Trust Company ("DTC") and registered in the name of Cede & Co., as
nominee for DTC. Interests in any permanent global securities will be held only
in book-entry form through DTC, except in the limited circumstances described in
the Prospectus. Payment for the Offered Securities shall be made by the
Underwriters in Federal (same day) funds by official check or checks or wire
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transfer to an account previously designated by Conoco or Conoco Funding at a
bank acceptable to the Representatives, in each case drawn to the order of
Conoco Funding at the place of payment specified in the Terms Agreement on the
Closing Date, against delivery to the Trustee as custodian for DTC of the Global
Securities representing all of the Offered Securities.
4. Certain Agreements of the Company. The Company agrees with the
several Underwriters that it will furnish to counsel for the Underwriters one
signed copy of the registration statement relating to the Registered Securities,
including all exhibits, in the form it became effective and of all amendments
thereto and that, in connection with each offering of Offered Securities:
(a) The Company will file the Prospectus with the Commission
pursuant to and in accordance with Rule 424(b)(2) (or, if applicable
and if consented to by the Representatives, subparagraph (5)) not later
than the second business day following the execution and delivery of
the Terms Agreement.
(b) The Company will advise the Representatives promptly of
any proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Representatives a reasonable opportunity
to comment on any such proposed amendment or supplement; and the
Company will also advise the Representatives promptly of the filing of
any such amendment or supplement and of the institution by the
Commission of any stop order proceedings in respect of the Registration
Statement or of any part thereof and will use its best efforts to
prevent the issuance of any such stop order and to obtain as soon as
possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any Underwriter or dealer, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act,
the Company promptly will notify the Representatives of such event and
will promptly prepare and file with the Commission, at its own expense,
an amendment or supplement that will correct such statement or omission
or an amendment that will effect such compliance. The terms
"supplement" and "amendment" as used in this Agreement include, without
limitation, all documents filed by the Company with the Commission
subsequent to the date of the Prospectus that are deemed to be
incorporated by reference in the Prospectus. Neither the
Representatives' consent to, nor the Underwriters' delivery of, any
such amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 5 hereof.
(d) As soon as practicable, but not later than 16 months,
after the date of each Terms Agreement, Conoco will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the latest of (i) the
effective date of the registration statement relating to the Registered
Securities, (ii) the effective date of the most recent post-effective
amendment to the Registration Statement to become effective prior to
the date of
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such Terms Agreement and (iii) the date of Conoco's most recent Annual
Report on Form 10-K filed with the Commission prior to the date of such
Terms Agreement, which will satisfy the provisions of Section 11(a) of
the Act.
(e) The Company will furnish to the Representatives copies of
the Registration Statement, including all exhibits, any related
preliminary prospectus, any related preliminary prospectus supplement,
the Prospectus and all amendments and supplements to such documents, in
each case as soon as available and in such quantities as the
Representatives reasonably request.
(f) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as the
Representatives designate and will continue such qualifications in
effect so long as required for the distribution; provided, however,
that neither Conoco nor Conoco Funding will be required in connection
therewith to register or qualify as a foreign corporation where it is
not now so qualified or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation in any
jurisdiction where it is not now so subject.
(g) During the period of five years after the date of any
Terms Agreement, the Company will furnish to the Representatives and,
upon request, to each of the other Underwriters, if any, as soon as
practicable after the end of each fiscal year, a copy of Conoco's
annual report to stockholders for such year; and the Company will
furnish to the Representatives (i) as soon as available, a copy of each
report (other than a report on Form 11-K) and any definitive proxy
statement of Conoco filed with the Commission under the Securities
Exchange Act of 1934 or mailed to stockholders, and (ii) from time to
time, such other information concerning Conoco or Conoco Funding as the
Representatives may reasonably request in connection with the offering
of the Offered Securities.
(h) Conoco Funding will pay all expenses incident to the
performance of its obligations under the Terms Agreement (including the
provisions of this Agreement), for any filing fees or other expenses
(including fees and disbursements of counsel) in connection with
qualification of the Registered Securities for sale and determination
of their eligibility for investment under the laws of such
jurisdictions as the Representatives may designate and the printing of
memoranda relating thereto, for any fees charged by investment rating
agencies for the rating of the Offered Securities, for any applicable
filing fee incident to, and the reasonable fees and disbursements of
counsel for the Underwriters in connection with, the review by the
National Association of Securities Dealers, Inc. of the Registered
Securities, for any travel expenses of Conoco's or Conoco Funding's
officers and employees and any other expenses of Conoco or Conoco
Funding in connection with attending or hosting meetings with
prospective purchasers of Registered Securities and for expenses
incurred in preparing, printing and distributing the Prospectus, any
preliminary prospectuses, any preliminary prospectus supplements or any
other amendments or supplements to the Prospectus to the Underwriters.
(i) Neither Conoco nor Conoco Funding will offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, or file with the Commission a registration statement under
the Act relating to United States dollar-denominated
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debt securities issued or guaranteed by Conoco or Conoco Funding and
having a maturity of more than one year from the date of issue, or
publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the
Representatives for a period beginning at the time of execution of the
Terms Agreement and ending the number of days after the Closing Date
specified under "Blackout" in the Terms Agreement; provided, however,
that this Section 4(i) shall not prohibit Conoco from offering,
selling, contracting to sell or otherwise disposing of, or from
publicly disclosing the intention to make any such offer, sale or
disposition of, up to $1,000,000,000 principal amount of its Floating
Rate Notes.
5. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Offered Securities will
be subject to the accuracy of the representations and warranties on the part of
the Company herein, to the accuracy of the statements of Company officers made
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives, on behalf of the Underwriters, shall have received a
letter, dated the date of delivery thereof, of PricewaterhouseCoopers
LLP confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect that:
(i) in their opinion the financial statements and any
schedules audited by them and incorporated by reference in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of Conoco, inquiries of officials of Conoco who have responsibility for
financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) the unaudited financial statements, if any,
included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations or
any material modifications should be made to such unaudited
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) if any unaudited "capsule" information is
contained in the Prospectus, the unaudited consolidated total
revenues, net income and net income per share amounts or other
amounts constituting such "capsule"
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information and described in such letter do not agree with the
corresponding amounts set forth in the unaudited consolidated
financial statements or were not determined on a basis
substantially consistent with that of the corresponding
amounts in the audited statements of income;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than three business days prior to the date of the
such letter, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of
Conoco and its consolidated subsidiaries or, at the date of
the latest available balance sheet read by such accountants,
there was any decrease in consolidated net current assets
(working capital) or stockholders' equity, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the closing date of the
latest income statement included in the Prospectus to the
closing date of the latest available income statement read by
such accountants there were any decreases, as compared with
the corresponding period of the previous year and with the
period of corresponding length ended the date of the latest
income statement included in the Prospectus, in consolidated
total revenues or net income;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such
letter;
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Prospectus (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of Conoco and its
subsidiaries subject to the internal controls of Conoco's accounting
system or are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter; and
(v) they have read any pro forma financial information which
is included in the Prospectus and performed the additional procedures
suggested by Example D of Statement of Auditing Standards No. 72.
All financial statements and schedules included in material
incorporated by reference into the Prospectus shall be deemed included
in the Prospectus for purposes of this subsection.
(b) On or prior to the date of the Terms Agreement, the
Representatives, on behalf of the Underwriters, shall have received a
letter, dated the date of delivery thereof, of Ernst & Young LLP
confirming that they are independent public accountants within the
meaning of the Act and the applicable published Rules and Regulations
thereunder and stating to the effect as outlined in
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Section 5(a) above, except relating to the consolidated financial
statements of Gulf Canada Resources Limited as of December 31, 2000 and
1999 and as of June 30, 2001, to each of the three years in the period
ended December 31, 2000 and to the three months and six months periods
ended June 30, 2001 and 2000.
(c) The Prospectus shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of Conoco, Conoco Funding or any Underwriter, shall be
contemplated by the Commission.
(d) Subsequent to the execution of the Terms Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of Conoco and its
subsidiaries taken as one enterprise which, in the judgment of a
majority in interest of the Underwriters including any Representatives,
is material and adverse and makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and
payment for the Offered Securities; (ii) any downgrading in the rating
of any debt securities of Conoco by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt
securities of Conoco (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); (iii) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such exchange
or any suspension of trading of any securities of Conoco on any
exchange or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal or New York authorities; or (v) any outbreak
or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of
a majority in interest of the Underwriters including any
Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(e) The Representatives, on behalf of the Underwriters, shall
have received an opinion, dated the Closing Date, of ▇▇▇▇▇ ▇▇▇▇▇
L.L.P., counsel for Conoco, to the effect that:
(i) Conoco has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Delaware, with corporate power and authority to own
its properties and conduct its business as described in the
Prospectus;
(ii) The Indenture has been duly authorized, executed
and delivered by Conoco and has been duly qualified under the
Trust Indenture Act; assuming the due authorization, execution
and delivery by Conoco Funding of the Indenture and the due
authorization, execution, issuance and delivery of the Offered
Securities by Conoco Funding in accordance
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with the provisions of the Indenture and the Terms Agreement
(including the provisions of this Agreement), the Indenture
and the Offered Securities are valid and legally binding
obligations of Conoco Funding, enforceable against Conoco
Funding in accordance with their terms, and the Indenture
and the related Guarantee are valid and legally binding
obligations of Conoco, enforceable against Conoco in
accordance with their terms, except in each case to the
extent such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general
principles of equity (whether considered in a proceeding in
equity or at law); and the Offered Securities conform in all
material respects to the description thereof contained in
the Prospectus;
(iii) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required under the Delaware General Corporation Law,
the laws of the State of Texas or the federal laws of the
United States for the consummation of the transactions
contemplated by the Terms Agreement (including the provisions
of this Agreement) in connection with the issuance or sale of
the Offered Securities by Conoco Funding, except such as have
been obtained and made under the Act and the Trust Indenture
Act and such as may be required under state securities laws;
(iv) The execution, delivery and performance by
Conoco of the Indenture and the Terms Agreement (including the
provisions of this Agreement) and the issuance and sale of the
Offered Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of
any of the terms and provisions of, or constitute a default
under, the Delaware General Corporation Law, the laws of the
State of Texas or the federal laws of the United States, and
Conoco has all necessary corporate power and authority to
perform the Guarantee as contemplated by the Indenture;
(v) The Registration Statement has become effective
under the Act, the Prospectus was filed with the Commission
pursuant to the subparagraph of Rule 424(b) specified in such
opinion on the date specified therein, and, to the knowledge
of such counsel, no stop order suspending the effectiveness of
the Registration Statement or any part thereof has been issued
and no proceedings for that purpose have been instituted or
are pending or threatened under the Act, and the registration
statement relating to the Registered Securities, as of its
effective date, the Registration Statement and the Prospectus,
as of the date of the Terms Agreement, and any amendment or
supplement thereto, as of its date (in each case, other than
the financial statements and schedules, the notes thereto and
the auditor's reports thereon, the other financial, reserve
engineering, numerical, statistical and accounting data
included or incorporated by reference therein, or omitted
therefrom, as to which such counsel need not comment), appear
on their face to comply as to form in all material respects
with the requirements of the Act, the Trust Indenture Act and
the Rules and Regulations; and
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(vi) The Terms Agreement (including the provisions of
this Agreement) has been duly authorized, executed and
delivered by Conoco.
Such counsel shall also state that such counsel has
participated in conferences with officers and other representatives of
Conoco, representatives of the independent public accountants of
Conoco, representatives of the Underwriters and counsel to the
Underwriters at which the contents of the Registration Statement and
the Prospectus were discussed and, although such counsel did not
independently verify such information and is not passing upon and does
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Prospectus, on the basis of the foregoing (relying as to
materiality in part upon statements of officers and other
representatives of Conoco) no facts came to such counsel's attention
that led such counsel to believe that the Registration Statement (other
than the financial statements and schedules, the notes thereto and the
auditor's reports thereon, the other financial, reserve engineering,
numerical, statistical and accounting data included or incorporated by
reference therein, or omitted therefrom, and the exhibits thereto, as
to which such counsel need not comment) as of its effective date
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus
(other than the financial statements, the notes thereto and the
auditors's report thereon and the other financial, reserve engineering,
numerical, statistical and accounting data included or incorporated by
reference therein, or omitted therefrom, as to which such counsel need
not comment) as of its issue date or as of the Closing Date included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(f) The Representatives, on behalf of the Underwriters, shall
have received an opinion, dated the Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Canadian counsel for Conoco Funding, to the effect that:
(i) Conoco Funding has been duly incorporated, is
validly existing as an unlimited liability company in good
standing under the laws of Nova Scotia, Canada, has the
corporate power and authority to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each Canadian jurisdiction
in which the conduct of its business requires such
qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material
adverse effect on Conoco Funding;
(ii) the Terms Agreement (including the provisions of
this Agreement) has been duly authorized, executed and
delivered by Conoco Funding;
(iii) the Indenture has been duly authorized,
executed and delivered by Conoco Funding;
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(iv) the Offered Securities have been duly authorized
and executed by Conoco Funding and issued and delivered by
Conoco Funding pursuant to the Indenture;
(v) the execution and delivery by Conoco Funding of,
and the performance by Conoco Funding of its obligations
under, the Terms Agreement (including the provisions of this
Agreement), the Indenture and the Offered Securities will not
contravene any provisions of the memorandum or articles of
association of Conoco Funding;
(vi) to the knowledge of such counsel, the execution
and delivery by Conoco Funding of, and the performance by
Conoco Funding of its obligations under, the Terms Agreement
(including the provisions of this Agreement), the Indenture
and the Offered Securities will not contravene any judgment,
order or decree of any governmental body, agency or court of
Canada or any jurisdiction therein, or any provision of
applicable Canadian federal law and no consent, approval,
authorization or order of or qualification with any Canadian
federal governmental body or agency is required for the
performance by Conoco Funding of its obligations under the
Terms Agreement (including the provisions of this Agreement),
the Indenture or the Offered Securities;
(vii) a court of competent jurisdiction in the
Province of Nova Scotia would give effect to the choice of New
York law as chosen by the parties as the proper law governing
the Indenture, the Offered Securities and the Terms Agreement
(including the provisions of this Agreement) provided that
such choice of law is bona fide and legal (in the sense that
it was not made with a view to avoiding the consequences of
the laws of any other jurisdiction) and provided that such
choice of law is not contrary to public policy, as that term
is understood under the laws of the Province of Nova Scotia
and the federal laws of Canada applicable therein; to the
knowledge of such counsel, there are no reasons under present
law for avoiding the choice of New York law to govern the
Indenture, the Offered Securities and the Terms Agreement
(including the provisions of this Agreement) under the laws of
the Province of Nova Scotia and the federal laws of Canada
applicable therein;
(viii) if the Indenture, the Offered Securities and
the Terms Agreement (including the provisions of this
Agreement) were sought to be enforced in the Province of Nova
Scotia in accordance with the laws applicable thereto, as
chosen by the parties, namely, New York law, a court of
competent jurisdiction in the Province of Nova Scotia would,
subject to paragraph (vii) above, and to the extent
specifically pleaded and proved as a fact by expert evidence,
recognize the choice of New York law and apply such law to all
issues that, under the conflict of laws rules of the Province
of Nova Scotia, are to be determined in accordance with the
proper or governing law of a contract, provided that none of
the provisions of the Indenture, the Offered Securities and
the Terms Agreement (including the provisions of this
Agreement), or of New York law, are contrary to public policy
as that term is understood under the laws of the Province of
Nova Scotia and the federal laws of Canada applicable
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therein; and further provided that, such court will not apply
those laws of New York which a Court of the Province of Nova
Scotia would characterize as revenue, expropriatory or penal
or the application of which would be inconsistent with public
policy, as such term is applied by such Court and, in matters
of procedure (as that term is understood under the laws of the
Province of Nova Scotia and the federal laws of Canada
applicable therein), the laws of the Province of Nova Scotia
will be applied including the Limitations Act, and a court of
competent jurisdiction in the Province of Nova Scotia will
retain discretion to decline to hear such action and apply
such law (i) if it is contrary to public policy (as that term
is understood under the laws of the Province of Nova Scotia
and the federal laws of Canada applicable therein) for such
court to do so, or (ii) if it is not the proper forum to hear
such an action, or (iii) if concurrent proceedings are being
brought elsewhere; to the knowledge of such counsel, there are
no reasons based on public policy, as that term is understood
under the laws of the Province of Nova Scotia and the laws of
Canada applicable therein, for avoiding enforcement of the
Indenture, the Offered Securities or the Terms Agreement
(including the provisions of this Agreement) (with the
exception of the indemnity and contribution provisions
contained therein);
(ix) the laws of the Province of Nova Scotia permit
an action to be brought in a court of competent jurisdiction
in the Province of Nova Scotia on any final and conclusive
judgment in personam for a definite sum of money of any
federal or state court located in the Borough of Manhattan in
the City of New York ("New York Court") respecting the
enforcement of the Indenture, the Offered Securities and the
Terms Agreement (including the provisions of this Agreement)
that is not impeachable as void or voidable under the internal
laws of the State of New York if: (i) the court rendering such
judgment had jurisdiction over the judgment debtor, as
recognized by the courts of the Province of Nova Scotia (to
the knowledge of such counsel, submission under the provisions
of the Indenture, the Offered Securities and the Terms
Agreement (including the provisions of this Agreement) to the
jurisdiction of the New York Court will be sufficient for this
purpose), and the judgment debtor was properly served in the
action leading to such judgment; (ii) such judgment was not
obtained by fraud or in a manner contrary to natural justice
and the enforcement thereof would not be inconsistent with
public policy, as such term is understood under the laws of
the Province of Nova Scotia, or contrary to any order made by
the Attorney General of Canada under the Foreign
Extraterritorial Measures Act (Canada) or by the Competition
Tribunal under the Competition Act (Canada); (iii) the
enforcement of such judgment does not constitute, directly or
indirectly, the enforcement of foreign revenue, expropriation
or penal laws or other laws of a public law nature; (iv) no
new admissible evidence relevant to the action is discovered
prior to rendering of judgment by the court in the Province of
Nova Scotia; (v) there has been no prior judgment in another
court between the same parties concerning the same issues as
are dealt with in the judgment to be enforced in the Province
of Nova Scotia; and (vi) the action to enforce such judgment
is commenced within the applicable limitation periods; to the
knowledge of such counsel, there are no reasons
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under present law of the Province of Nova Scotia for
avoiding recognition of said judgments of New York Courts
which might be rendered in respect of the Indenture, the
Offered Securities and the Terms Agreement (including the
provisions of this Agreement) based upon public policy, as
that term is understood under the laws of the Province of
Nova Scotia and the federal laws of Canada applicable
therein; and
(x) in an action on a final and conclusive judgment
in personam for a definite sum of money of a New York Court
which is not impeachable as void or voidable under New York
law, a court of competent jurisdiction in the Province of Nova
Scotia would not refuse to recognize the jurisdiction of the
court rendering such judgment on the basis of process having
been served on CT Corporation System as the agent to receive
service of process in the United States of America appointed
by Conoco Funding under the Terms Agreement (including the
provisions of this Agreement) provided Conoco Funding has not
purported to revoke the appointment, or CT Corporation System
has not terminated the agency or otherwise rendered service on
it ineffective.
(g) The Representatives, on behalf of the Underwriters, shall
have received an opinion, dated the Closing Date, of ▇▇▇▇▇ ▇. ▇▇▇▇▇,
Esq., senior counsel for Conoco, to the effect that:
(i) Conoco is duly qualified to do business as a
foreign corporation in good standing in all jurisdictions in
which its ownership or lease of property or the conduct of its
business requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on Conoco and its
subsidiaries, taken as whole;
(ii) Each Material Subsidiary of Conoco (as defined
in the Terms Agreement) has been duly incorporated or
organized, is validly existing as a corporation or partnership
in good standing under the laws of the jurisdiction of its
organization, has the corporate or partnership power and
authority to own its property and to conduct its business as
described in the Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent
that the failure to be so qualified or be in good standing
would not have a material adverse effect on Conoco and its
subsidiaries, taken as a whole; all of the issued shares of
capital stock of each Material Subsidiary of Conoco have been
duly and validly authorized and issued, are fully paid and
non-assessable; except as set forth in the Terms Agreement,
all of the issued shares of capital stock of each Material
Subsidiary and all partnership interests in any Material
Subsidiary, where applicable, are owned directly or indirectly
by Conoco, free and clear of all liens, encumbrances, equities
or claims;
(iii) The execution, delivery and performance of the
Indenture, the Terms Agreement (including the provisions of
this Agreement) and the issuance and sale of the Offered
Securities and compliance with the terms
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and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute
a default under, any agreement or instrument to which Conoco,
any Material Subsidiary or Conoco Funding is a party or by
which Conoco, any Material Subsidiary or Conoco Funding is
bound or to which any of the properties of the Company, any
Material Subsidiary or Conoco Funding is subject that is
material to Conoco and its subsidiaries, taken as a whole, or
to Conoco Funding, or the charter or by-laws of Conoco;
(iv) The descriptions in the Registration Statement
and Prospectus of statutes, legal and governmental proceedings
and contracts and other documents are accurate in all material
respects and fairly present the information required to be
shown; and
(v) Such counsel does not know of any legal or
governmental proceedings pending or threatened to which Conoco
or any of its subsidiaries is a party or to which any of the
properties of Conoco or any of its subsidiaries is subject
that, in such counsel's judgment, are required to be described
in the Registration Statement or the Prospectus and are not so
described or of any statutes, regulations, contracts or other
documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described
or filed as required.
Such counsel shall also state that such counsel has
participated in conferences with officers and other representatives of
Conoco, representatives of the independent public accountants of
Conoco, representatives of the Underwriters and counsel to the
Underwriters at which the contents of the Registration Statement and
the Prospectus were discussed and, although such counsel did not
independently verify such information and is not passing upon and does
not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and
the Prospectus other than those referenced in paragraph (iv) above, on
the basis of the foregoing no facts came to such counsel's attention
that led such counsel to believe that the Registration Statement (other
than the financial statements and schedules, the notes thereto and the
auditor's reports thereon, the other financial, reserve engineering,
numerical, statistical and accounting data included or incorporated by
reference therein, or omitted therefrom, and the exhibits thereto, as
to which such counsel need express no belief) as of its effective date
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that the Prospectus
(other than the financial statements, the notes thereto and the
auditors's report thereon and the other financial, reserve engineering,
numerical, statistical and accounting data included or incorporated by
reference therein, or omitted therefrom, as to which such counsel need
express no belief) as of its issue date or as of the Closing Date
included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(h) The Representatives, on behalf of the Underwriters, shall
have received from Cravath, Swaine & ▇▇▇▇▇, counsel for the
Underwriters, such
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opinion or opinions, dated the Closing Date, with respect to the
incorporation of Conoco, the validity of the Offered Securities, the
Registration Statement, the Prospectus and other related matters as the
Representatives may require, and Conoco shall have furnished to such
counsel such documents as they request for the purpose of enabling them
to pass upon such matters.
(i) The Representatives, on behalf of the Underwriters, shall
have received a certificate, dated the Closing Date, of the President
or any Vice President and a principal financial or accounting officer
of Conoco in which such officers, to the best of their knowledge after
reasonable investigation, shall state that the representations and
warranties of Conoco in this Agreement are true and correct, that
Conoco has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date, that no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission and that, subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other),
business, properties or results of operations of Conoco and its
subsidiaries taken as a whole except as set forth in or contemplated by
the Prospectus or as described in such certificate.
(j) The Representatives, on behalf of the Underwriters, shall
have received a certificate, dated the Closing Date, of the President
or any Vice President of Conoco Funding in which such officer, to the
best of his knowledge after reasonable investigation, shall state that
the representations and warranties of Conoco Funding in this Agreement
are true and correct, that Conoco Funding has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date and that no stop
order suspending the effectiveness of the Registration Statement or of
any part thereof has been issued and no proceedings for that purpose
have been instituted or are contemplated by the Commission, except as
described in such certificate.
(k) The Representatives, on behalf of the Underwriters, shall
have received a letter, dated the Closing Date, of
PricewaterhouseCoopers LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Representatives may in their sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue
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statement or alleged untrue statement of any material fact contained in the
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary prospectus or preliminary prospectus supplement, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that neither Conoco nor
Conoco Funding will be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives, if any,
specifically for use therein, it being understood and agreed that the only such
information furnished by any Underwriter consists of the information described
as such in the Terms Agreement; and provided, further, that with respect to any
untrue statement or alleged untrue statement in or omission or alleged omission
from any preliminary prospectus or preliminary prospectus supplement the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased the Offered Securities concerned, to
the extent that a prospectus supplement relating to such Offered Securities was
required to be delivered by such Underwriter under the Act in connection with
such purchase and any such loss, claim, damage or liability of such Underwriter
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Offered Securities to such
person, a copy of the Prospectus (exclusive of material incorporated by
reference) if Conoco or Conoco Funding had previously furnished copies thereof
to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless Conoco and Conoco Funding, their respective directors and officers and
each person, if any, who controls Conoco or Conoco Funding within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities to
which Conoco or Conoco Funding may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, or any related preliminary
prospectus or preliminary prospectus supplement, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives, if any, specifically
for use therein, and will reimburse any legal or other expenses reasonably
incurred by Conoco or Conoco Funding in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
the Terms Agreement.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect
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thereof is to be made against the indemnifying party under subsection (a) or (b)
above, notify the indemnifying party of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under
subsection (a) or (b) above. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to, or an
admission of fault, culpability or a failure to act by or on behalf of an
indemnified party.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering of the Offered
Securities 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 Company on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by Conoco Funding bear to the total underwriting fees paid to (including any
underwriting discounts and commissions received by) the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party as a result of the losses,
claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any action or claim which is the subject of this subsection (d). Notwithstanding
the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of such untrue or
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alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section shall be in addition to any liability which the
respective Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each director of Conoco or Conoco Funding, to each officer of
Conoco or Conoco Funding who has signed the Registration Statement and to each
person, if any, who controls Conoco or Conoco Funding within the meaning of the
Act.
7. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities under the Terms Agreement
and the aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Offered Securities, the Representatives may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non- defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
under the Terms Agreement (including the provisions of this Agreement), to
purchase the Offered Securities that such defaulting Underwriters agreed but
failed to purchase. If any Underwriter or Underwriters so default and the
aggregate principal amount of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total principal amount of Offered
Securities and arrangements satisfactory to the Representatives and the Company
for the purchase of such Offered Securities by other persons are not made within
36 hours after such default, the Terms Agreement will terminate without
liability on the part of any non-defaulting Underwriter, Conoco or Conoco
Funding, except as provided in Section 8. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability for
its default.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
Conoco or Conoco Funding or their respective officers and of the several
Underwriters set forth in or made pursuant to the Terms Agreement (including the
provisions of this Agreement) will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, Conoco or Conoco Funding or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the purchase
of the Offered Securities by the Underwriters is not consummated, the Company
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 4 and the respective obligations of the Company and the
Underwriters pursuant to Section 6 shall remain in effect. If the purchase of
the Offered Securities by the Underwriters is not consummated for any reason
other than solely because of the termination of the Terms Agreement pursuant to
Section 7 or the occurrence of any event specified in clause (iii),
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(iv) or (v) of Section 5(c), the Company will reimburse the Underwriters for all
out-of-pocket expenses (including fees and disbursements of counsel) reasonably
incurred by them in connection with the offering of the Offered Securities.
9. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to them at their address furnished to the Company in writing for the purpose of
communications hereunder or, if sent to Conoco or Conoco Funding, will be
mailed, delivered or telegraphed and confirmed to it at Conoco Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief Financial Officer.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon Conoco, Conoco
Funding and such Underwriters as are identified in the Terms Agreement and their
respective successors and the officers and directors and controlling persons
referred to in Section 6, and no other person will have any right or obligation
hereunder.
11. Representation of Underwriters. Any Representatives will act for
the several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives will be binding upon all the
Underwriters. None of the services performed by the Underwriters under this
Agreement have been or will be performed in Canada for purposes of the Income
Tax Act (Canada).
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. APPLICABLE LAW. THIS AGREEMENT AND THE TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
Each of Conoco and Conoco Funding hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to the
Terms Agreement (including the provisions of this Agreement) or the transactions
contemplated thereby.
CONOCO FUNDING HAS APPOINTED CT CORPORATION SYSTEM, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ AS ITS AUTHORIZED AGENT (THE "AUTHORIZED AGENT") UPON WHOM
PROCESS MAY BE SERVED IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE TERMS AGREEMENT (INCLUDING THE PROVISIONS OF THIS AGREEMENT) OR
THE TRANSACTIONS CONTEMPLATED THEREBY THAT MAY BE INSTITUTED IN ANY FEDERAL OR
STATE COURT IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK BY ANY
UNDERWRITER OR BY ANY PERSON WHO CONTROLS ANY UNDERWRITER.