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EXHIBIT 4.1
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT is entered into as of December 10, 1998, between
Devon Energy Corporation, an Oklahoma corporation ("Devon"), and Northstar
Energy Corporation, an Alberta corporation ("Northstar").
RECITALS
WHEREAS, pursuant to an Amended and Restated Combination Agreement dated as
of June 29, 1998, by and between Devon and Northstar (such agreement, as it may
be amended or restated, is hereinafter referred to as the "Combination
Agreement"), the parties agreed that on the Effective Date (as defined in the
Combination Agreement), Devon and Northstar would execute and deliver a Support
Agreement containing the terms and conditions set forth in Exhibit D to the
Combination Agreement together with such other terms and conditions as may be
agreed to by the parties to the Combination Agreement acting reasonably.
WHEREAS, pursuant to an arrangement (the "Arrangement") effected by
Articles of Arrangement dated December 10, 1998 filed pursuant to the Business
Corporations Act (Alberta) (or any successor or other corporate statute by which
Northstar may in the future be governed) (the "Act") each issued and outstanding
common share of Northstar (a "Northstar Common Share") was exchanged for issued
and outstanding Exchangeable Shares of Northstar (the "Exchangeable Shares").
WHEREAS, the Articles of Amendment of Northstar set forth the rights,
privileges, restrictions and conditions (collectively, the "Exchangeable Share
Provisions") attaching to the Exchangeable Shares.
WHEREAS, the parties hereto desire to make appropriate provision and to
establish a procedure whereby Devon will take certain actions and make certain
payments and deliveries necessary to ensure that Northstar will be able to make
certain payments and to deliver or cause to be delivered shares of Devon Common
Stock in satisfaction of the obligations of Northstar under the Exchangeable
Share Provisions with respect to the payment and satisfaction of dividends,
Liquidation Amounts, Retraction Prices and Redemption Prices, all in accordance
with the Exchangeable Share Provisions.
NOW, THEREFORE, in consideration of the respective covenants and agreements
provided in this agreement and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged), the parties agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS
Each term denoted herein by initial capital letters and not otherwise
defined herein shall have the meaning attributed thereto in the Exchangeable
Share Provisions, unless the context requires otherwise.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this agreement into articles, sections and paragraphs and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this agreement.
1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and vice
versa. Words importing the use of any gender shall include all genders.
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1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this
agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
COVENANTS OF DEVON AND NORTHSTAR
2.1 COVENANTS OF DEVON REGARDING EXCHANGEABLE SHARES
So long as any Exchangeable Shares are outstanding, Devon will:
(a) not declare or pay any dividend on Devon Common Stock unless (i)
Northstar will have sufficient assets, funds and other property available
to enable the due declaration and the due and punctual payment in
accordance with applicable law of an equivalent dividend on the
Exchangeable Shares and (ii) subsection 2.1(b) shall be complied with in
connection with such dividend;
(b) cause Northstar to declare simultaneously with the declaration of
any dividend on Devon Common Stock an equivalent dividend on the
Exchangeable Shares and, when such dividend is paid on Devon Common Stock,
cause Northstar to pay simultaneously therewith such equivalent dividend on
the Exchangeable Shares, in each case in accordance with the Exchangeable
Share Provisions;
(c) advise Northstar sufficiently in advance of the declaration by
Devon of any dividend on Devon Common Stock and take all such other actions
as are necessary, in cooperation with Northstar, to ensure that the
respective declaration date, record date and payment date for a dividend on
the Exchangeable Shares shall be the same as the record date, declaration
date and payment date for the corresponding dividend on Devon Common Stock
and that such dividend on the Exchangeable Shares will correspond with any
requirement of the principal stock exchange on which the Exchangeable
Shares are listed;
(d) ensure that the record date for any dividend declared on Devon
Common Stock is not less than ten Business Days after the declaration date
for such dividend;
(e) take all such actions and do all such things as are necessary or
desirable to enable and permit Northstar, in accordance with applicable
law, to pay and otherwise perform its obligations with respect to the
satisfaction of the Liquidation Amount in respect of each issued and
outstanding Exchangeable Share upon the liquidation, dissolution or
winding-up of Northstar or any other distribution of the assets of
Northstar for the purpose of winding-up its affairs, including without
limitation all such actions and all such things as are necessary or
desirable to enable and permit Northstar to cause to be delivered shares of
Devon Common Stock to the holders of Exchangeable Shares in accordance with
the provisions of Article 5 of the Exchangeable Share Provisions;
(f) take all such actions and do all such things as are necessary or
desirable to enable and permit Northstar, in accordance with applicable
law, to pay and otherwise perform its obligations with respect to the
satisfaction of the Retraction Price and the Redemption Price, including
without limitation all such actions and all such things as are necessary or
desirable to enable and permit Northstar to cause to be delivered shares of
Devon Common Stock to the holders of Exchangeable Shares, upon the
retraction or redemption of the Exchangeable Shares in accordance with the
provisions of Article 6 or Article 7 of the Exchangeable Share Provisions,
as the case may be; and
(g) not exercise its vote as a direct or indirect shareholder to
initiate the voluntary liquidation, dissolution or winding-up of Northstar
nor take any action or omit to take any action that is designed to result
in the liquidation, dissolution or winding-up of Northstar.
2.2 SEGREGATION OF FUNDS
Devon will cause Northstar to deposit a sufficient amount of funds in a
separate account and segregate a sufficient amount of such assets and other
property as is necessary to enable Northstar to pay or otherwise
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satisfy the applicable dividends, Liquidation Amount, Retraction Price or
Redemption Price, in each case for the benefit of holders from time to time of
the Exchangeable Shares, and Northstar will use such funds, assets and other
property so segregated exclusively for the payment of dividends and the payment
or other satisfaction of the Liquidation Amount, the Retraction Price or the
Redemption Price, as applicable, net of any corresponding withholding tax
obligations and for the remittance of such withholding tax obligations.
2.3 RESERVATION OF SHARES OF DEVON COMMON STOCK
Devon hereby represents, warrants and covenants that it has irrevocably
reserved for issuance and will at all times keep available, free from
pre-emptive and other rights, out of its authorized and unissued capital stock
such number of shares of Devon Common Stock (or other shares or securities into
which Devon Common Stock may be reclassified or changed as contemplated by
section 2.7 hereof) (i) as is equal to the sum of (A) the number of Exchangeable
Shares issued and outstanding from time to time and (B) the number of
Exchangeable Shares issuable upon the exercise of all rights to acquire
Exchangeable Shares outstanding from time to time and (ii) as are now and may
hereafter be required to enable and permit Northstar to meet its obligations
hereunder, under the Voting and Exchange Trust Agreement, under the Exchangeable
Share Provisions and under any other security or commitment pursuant to the
Arrangement with respect to which Devon may now or hereafter be required to
issue shares of Devon Common Stock.
2.4 NOTIFICATION OF CERTAIN EVENTS
In order to assist Devon to comply with its obligations hereunder,
Northstar will give Devon notice of each of the following events at the time set
forth below:
(a) immediately, in the event of any determination by the Board of
Directors of Northstar to take any action which would require a vote of the
holders of Exchangeable Shares for approval;
(b) immediately, upon the earlier of (i) receipt by Northstar of
notice of, and (ii) Northstar otherwise becoming aware of, any threatened
or instituted claim, suit, petition or other proceedings with respect to
the involuntary liquidation, dissolution or winding-up of Northstar or to
effect any other distribution of the assets of Northstar among its
shareholders for the purpose of winding-up its affairs;
(c) immediately, upon receipt by Northstar of a Retraction Request (as
defined in the Exchangeable Share Provisions);
(d) at least 130 days prior to any Automatic Redemption Date
determined by the Board of Directors of Northstar in accordance with clause
(b) of the definition of Automatic Redemption Date in the Exchangeable
Share Provisions;
(e) as soon as practicable upon the issuance by Northstar of any
Exchangeable Shares or rights to acquire Exchangeable Shares; and
(f) in the event of any determination by the Board of Directors of
Northstar to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Northstar or to effect any other distribution
of the assets of Northstar among its shareholders for the purpose of
winding-up its affairs, at least 60 days prior to the proposed effective
date of such liquidation, dissolution, winding-up or other distribution.
2.5 DELIVERY OF SHARES OF DEVON COMMON STOCK
In furtherance of its obligations hereunder, upon notice of any event which
requires Northstar to cause to be delivered shares of Devon Common Stock to any
holder of Exchangeable Shares, Devon shall forthwith issue and deliver the
requisite shares of Devon Common Stock to or to the order of the former holder
of the surrendered Exchangeable Shares, as Northstar shall direct. All such
shares of Devon Common Stock shall be duly issued as fully paid and
non-assessable and shall be free and clear of any lien, claim, encumbrance,
security interest or adverse claim or interest.
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2.6 QUALIFICATION OF SHARES OF DEVON COMMON STOCK
Devon covenants that if any shares of Devon Common Stock (or other shares
or securities into which Devon Common Stock may be reclassified or changed as
contemplated by Section 2.7 hereof) to be issued and delivered hereunder
(including for greater certainty, pursuant to the Exchangeable Share Provisions,
or pursuant to the Exchange Put Right, the Exchange Right or the Automatic
Exchange Rights (all as defined in the Voting and Exchange Trust Agreement))
require registration or qualification with or approval of or the filing of any
document including any prospectus or similar document, the taking of any
proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any Canadian or United States
federal, provincial or state law or regulation or pursuant to the rules and
regulations of any regulatory authority, or the fulfillment of any other legal
requirement (collectively, the "Applicable Laws") before such shares (or other
shares or securities into which Devon Common Stock may be reclassified or
changed as contemplated by Section 2.7 hereof) may be issued and delivered by
Devon to the initial holder thereof (other than Northstar) or in order that such
shares may be freely traded thereafter (other than any restrictions on transfer
by reason of a holder being a "control person" of Devon for purposes of Canadian
federal or provincial securities law or an "affiliate" of Devon for purposes of
United States federal or state securities law), Devon will in good faith
expeditiously take all such actions and do all such things as are necessary to
cause such shares of Devon Common Stock (or other shares or securities into
which Devon Common Stock may be reclassified or changed as contemplated by
Section 2.7 hereof) to be and remain duly registered, qualified or approved.
Devon represents and warrants that it has in good faith taken all actions and
done all things as are necessary under Applicable Laws as they exist on the date
hereof to cause the shares of Devon Common Stock (or other shares or securities
into which Devon Common Stock may be reclassified or changed as contemplated by
Section 2.7 hereof) to be issued and delivered hereunder (including, for greater
certainty, pursuant to the Exchangeable Share Provisions, or pursuant to the
Exchange Put Right, the Exchange Right and the Automatic Exchange Rights) to be
freely tradeable thereafter (other than restrictions on transfer by reason of a
holder being a "control person" of Devon for the purposes of Canadian federal
and provincial securities law or an "affiliate" of Devon for purposes of United
States federal or state securities law). Devon will in good faith expeditiously
take all such actions and do all such things as are necessary to cause all
shares of Devon Common Stock (or other shares or securities into which Devon
Common Stock may be reclassified or changed as contemplated by Section 2.7
hereof) to be delivered hereunder (including, for greater certainty, pursuant to
Exchangeable Share Provisions, or pursuant to the Exchange Put Right, the
Exchange Right or the Automatic Exchange Rights) to be listed, quoted or posted
for trading on all stock exchanges and quotation systems on which such shares
are listed, quoted or posted for trading at such time. Devon will in good faith
expeditiously take all such action and do all such things as are necessary to
cause all Exchangeable Shares to be and to continue to be listed and posted for
trading on The Toronto Stock Exchange or, in the event that a listing on The
Toronto Stock Exchange is not available, on another recognized Canadian stock
exchange.
2.7 EQUIVALENCE
(a) Devon will not:
(i) issue or distribute shares of Devon Common Stock (or securities
exchangeable for or convertible into or carrying rights to acquire shares
of Devon Common Stock) to the holders of all or substantially all of the
then outstanding shares of Devon Common Stock by way of stock dividend or
other distribution; or
(ii) issue or distribute rights, options or warrants to the holders of
all or substantially all of the then outstanding shares of Devon Common
Stock entitling them to subscribe for or to purchase shares of Devon Common
Stock (or securities exchangeable for or convertible into or carrying
rights to acquire shares of Devon Common Stock); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding shares of Devon Common Stock (A) shares or
securities of Devon of any class other than Devon Common Stock (other than
shares convertible into or exchangeable for or carrying rights to acquire
shares of Devon
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Common Stock), (B) rights, options or warrants other than those referred to
in subsection 2.7 (a) (ii) above, (C) evidences of indebtedness of Devon or
(D) assets of Devon;
unless
(iv) one or both of Devon and Northstar is permitted under applicable
law to issue or distribute the economic equivalent on a per share basis of
such rights, options, warrants, securities, shares, evidences of
indebtedness or other assets to the holders of the Exchangeable Shares; and
(v) one or both of Devon and Northstar shall issue or distribute the
economic equivalent on a per share basis of such rights, options, warrants,
securities, shares, evidences of indebtedness or other assets
simultaneously to the holders of the Exchangeable Shares.
(b) Devon will not:
(i) subdivide, redivide or change the then outstanding shares of Devon
Common Stock into a greater number of shares of Devon Common Stock; or
(ii) reduce, combine or consolidate or change the then outstanding
shares of Devon Common Stock into a lesser number of shares of Devon Common
Stock; or
(iii) reclassify or otherwise change the shares of Devon Common Stock
or effect an amalgamation, merger, reorganization or other transaction
involving or affecting the shares of Devon Common Stock;
unless
(iv) Northstar is permitted under applicable law to simultaneously
make the same or an economically equivalent change to, or in the rights of
the holders of, the Exchangeable Shares; and
(v) the same or an economically equivalent change is simultaneously
made to, or in the rights of the holders of, the Exchangeable Shares.
(c) Devon will ensure that the record date for any event referred to in
section 2.7 (a) or 2.7(b) above, or (if no record date is applicable for such
event) the effective date for any such event, is not less than 20 Business Days
after the date on which such event is declared or announced by Devon (with
simultaneous notice thereof to be given by Devon to Northstar).
2.8 TENDER OFFERS, ETC.
In the event that a tender offer, share exchange offer, issuer bid,
take-over bid or similar transaction with respect to Devon Common Stock (an
"Offer") is proposed by Devon or is proposed to Devon or its shareholders and is
recommended by the Board of Directors of Devon, or is otherwise effected or to
be effected with the consent or approval of the Board of Directors of Devon,
Devon shall, in good faith, take all such actions and do all such things as are
necessary or desirable to enable and permit holders of Exchangeable Shares to
participate in such Offer to the same extent and on an equivalent basis as the
holders of shares of Devon Common Stock, without discrimination, including,
without limiting the generality of the foregoing, Devon will use its good faith
efforts expeditiously to (and shall, in the case of a transaction proposed by
Devon or where Devon is a participant in the negotiation thereof) ensure that
holders of Exchangeable Shares may participate in all such Offers without being
required to retract Exchangeable Shares as against Northstar (or, if so
required, to ensure that any such retraction shall be effective only upon, and
shall be conditional upon, the closing of the Offer and only to the extent
necessary to tender or deposit to the Offer).
2.9 OWNERSHIP OF OUTSTANDING SHARES
Without the prior approval of Northstar and the prior approval of the
holders of the Exchangeable Shares given in accordance with Section 10.2 of the
Exchangeable Share Provisions, Devon covenants and agrees in favor of Northstar
that, as long as any outstanding Exchangeable Shares are owned by any person or
entity other than Devon or any of its Subsidiaries, Devon will be and remain the
direct or indirect beneficial owner of all issued and outstanding Northstar
Common Shares and of at least 50.1% of all other outstanding securities
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of Northstar carrying or entitled to voting rights in any circumstances
generally for the election of directors, in each case other than the
Exchangeable Shares.
2.10 DEVON NOT TO VOTE EXCHANGEABLE SHARES
Devon covenants and agrees that it will appoint and cause to be appointed
proxy holders with respect to all Exchangeable Shares held by Devon and its
Subsidiaries for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. Devon further covenants and agrees that it will not, and will cause its
Subsidiaries not to, exercise any voting rights which may be exercisable by
holders of Exchangeable Shares from time to time pursuant to the Exchangeable
Share Provisions or pursuant to the provisions of the Act with respect to any
Exchangeable Shares held by it or by its Subsidiaries in respect of any matter
considered at any meeting of holders of Exchangeable Shares.
2.11 DUE PERFORMANCE
On and after the Effective Date, Devon shall duly and timely perform all of
its obligations provided for in connection with the Plan of Arrangement,
including any obligations that may arise upon the exercise of Devon's rights
under the Exchangeable Share Provisions.
ARTICLE 3
GENERAL
3.1 TERM
This agreement shall come into force and be effective as of the date hereof
and shall terminate and be of no further force and effect at such time as no
Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Exchangeable Shares) are held by any party
other than Devon and any of its Subsidiaries.
3.2 CHANGES IN CAPITAL OF DEVON AND NORTHSTAR
Notwithstanding the provisions of section 3.4 hereof, at all times after
the occurrence of any event effected pursuant to section 2.7 or 2.8 hereof, as a
result of which either Devon Common Stock or the Exchangeable Shares or both are
in any way changed, this agreement shall forthwith be amended and modified as
necessary in order that it shall apply with full force and effect, mutatis
mutandis, to all new securities into which Devon Common Stock or the
Exchangeable Shares or both are so changed, and the parties hereto shall as soon
as possible execute and deliver an agreement in writing giving effect to and
evidencing such necessary amendments and modifications.
3.3 SEVERABILITY
If any provision of this agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
agreement shall not in any way be affected or impaired thereby and this
agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
3.4 AMENDMENTS, MODIFICATIONS, ETC.
This agreement may not be amended, modified or waived except by an
agreement in writing executed by Northstar and Devon and approved by the holders
of the Exchangeable Shares in accordance with Section 10.2 of the Exchangeable
Share Provisions.
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3.5 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of section 3.4, the parties to this
agreement may in writing, at any time and from time to time, without the
approval of the holders of the Exchangeable Shares, amend or modify this
agreement for the purposes of:
(a) adding to the covenants of either or both parties for the
protection of the holders of the Exchangeable Shares;
(b) making such amendments or modifications not inconsistent with this
agreement as may be necessary or desirable with respect to matters or
questions which, in the opinion of the board of directors of each of
Northstar and Devon, it may be expedient to make, provided that each such
board of directors shall be of the opinion that such amendments or
modifications will not be prejudicial to the interests of the holders of
the Exchangeable Shares; or
(c) making such changes or corrections which, on the advice of counsel
to Northstar and Devon, are required for the purpose of curing or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error; provided that the boards of
directors of each of Northstar and Devon shall be of the opinion that such
changes or corrections will not be prejudicial to the interests of the
holders of the Exchangeable Shares.
3.6 MEETING TO CONSIDER AMENDMENTS
Northstar, at the request of Devon, shall call a meeting or meetings of the
holders of the Exchangeable Shares for the purpose of considering any proposed
amendment or modification requiring approval of such shareholders. Any such
meeting or meetings shall be called and held in accordance with the by-laws of
Northstar, the Exchangeable Share Provisions and all Applicable Laws.
3.7 AMENDMENTS ONLY IN WRITING
No amendment to or modification or waiver of any of the provisions of this
agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by both of the parties hereto.
3.8 INUREMENT
This agreement shall be binding upon and inure to the benefit of the
parties hereto and the holders, from time to time, of Exchangeable Shares and
each of their respective heirs, successors and assigns.
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3.9 NOTICES TO PARTIES
All notices and other communications between the parties shall be in
writing and shall be deemed to have been given if delivered personally or by
confirmed telecopy to the parties at the following addresses (or at such other
address for either such party as shall be specified in like notice):
(a) if to Devon to:
Devon Energy Corporation
00 Xxxxx Xxxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxx, Xxxxxxxx
00000-0000
Attention: President
Facsimile No. 000-000-0000
(b) if to Northstar to:
Northstar Energy Corporation
3000, 000 -- 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Facsimile No. 000-000-0000
Any notice or other communication given personally shall be deemed to have
been given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of confirmed receipt thereof,
unless such day is not a Business Day, in which case it shall be deemed to have
been given and received upon the immediately following Business Day.
3.10 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and the
same instrument.
3.11 JURISDICTION
This agreement shall be construed and enforced in accordance with the laws
of the Province of Alberta and the federal laws of Canada applicable therein.
3.12 ATTORNMENT
Devon agrees that any action or proceeding arising out of or relating to
this agreement may be instituted in the courts of the Province of Alberta,
waives any objection which it may have now or hereafter to the venue of any such
action or proceeding, irrevocably submits to the jurisdiction of such courts in
any such action or proceeding, agrees to be bound by any judgment of such courts
and not to seek, and hereby waives, any review of the merits of any such
judgment by the courts of any other jurisdiction and hereby appoints Northstar
at its registered office in the Province of Alberta as Devon's attorney for
service of process.
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IN WITNESS WHEREOF, Devon and Northstar have caused this agreement to be
signed by their respective officers thereunder duly authorized, all as of the
date first written above.
DEVON ENERGY CORPORATION
By: /s/ DUKE X. XXXXX
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By: /s/ XXXXXX X. XXXX
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NORTHSTAR ENERGY CORPORATION
By: /s/ XXXX X. XXXX
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By: /s/ XXXXXX X. XXXXX
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