<PAGE>
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2000
Commission File No. 1-8968
ANADARKO PETROLEUM CORPORATION
17001 Northchase Drive, Houston, Texas 77060-2141
(281) 875-1101
Incorporated in the Employer Identification
State of Delaware No. 76-0146568
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90
days. Yes X No _____
The number of shares outstanding and entitled to vote of the
Company's common stock as of April 28, 2000 is shown below:
Number of Shares
Title of Class Outstanding
Common Stock, par value $0.10 per share 128,086,367
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
thousands except per share amounts 2000 1999
<S> <C> <C>
Revenues
Gas sales $102,143 $ 77,840
Oil and condensate sales 101,751 43,580
Natural gas liquids and other 43,157 14,944
Total 247,051 136,364
Cost and Expenses
Operating expenses 42,939 34,056
Administrative and general 30,086 24,409
Depreciation, depletion and amortization 57,308 56,524
Other taxes 11,321 9,233
Impairments related to international
properties -- 20,000
Total 141,654 144,222
Operating Income (Loss) 105,397 (7,858)
Interest Expense 21,094 18,638
Income (Loss) Before Income Taxes 84,303 (26,496)
Income Taxes 42,504 (6,141)
Net Income (Loss) $ 41,799 $(20,355)
Preferred Stock Dividends 2,730 2,730
Net Income (Loss) Available to
Common Stockholders $ 39,069 $(23,085)
Per Common Share
Net income (loss) - basic $ 0.31 $ (0.19)
Net income (loss) - diluted $ 0.30 $ (0.19)
Dividends $ 0.05 $ 0.05
Average Number of Common Shares Outstanding 128,046 120,492
</TABLE>
See accompanying notes to consolidated financial statements.
2
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<PAGE>
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
thousands 2000 1999
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 9,369 $ 44,769
Accounts receivable 277,533 259,658
Inventories 32,133 46,090
Prepaid expenses 3,691 5,425
Total 322,726 355,942
Properties and Equipment
Original cost 6,095,154 5,917,195
Less accumulated depreciation,
depletion and amortization 2,287,451 2,236,044
Net properties and equipment - based
on the full cost method of accounting
for oil and gas properties 3,807,703 3,681,151
Deferred Charges 89,412 61,270
$4,219,841 $4,098,363
</TABLE>
See accompanying notes to consolidated financial statements.
3
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET (continued)
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
thousands 2000 1999
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
Trade and other $ 214,705 $ 298,589
Banks 24,576 26,446
Accrued expenses
Interest 13,689 19,949
Taxes and other 44,195 42,187
Total 297,165 387,171
Long-term Debt 1,573,217 1,443,322
Deferred Credits
Deferred income taxes 614,997 576,804
Other 147,833 156,512
Total 762,830 733,316
Stockholders' Equity
Preferred stock, par value $1.00
(2,000,000 shares authorized, 200,000
shares issued as of March 31, 2000
and December 31, 1999) 200,000 200,000
Common stock, par value $0.10
(300,000,000 shares authorized,
130,075,884 and 129,620,333 shares
issued as of March 31, 2000 and
December 31, 1999, respectively) 13,008 12,962
Paid-in capital 662,129 633,957
Retained earnings (as of March 31, 2000,
retained earnings were not restricted
as to the payment of dividends) 796,146 763,480
Deferred compensation (7,341) (7,907)
Executives and Directors Benefits Trust,
at market value (2,000,000 shares as of
March 31, 2000 and December 31, 1999) (77,313) (67,938)
Total 1,586,629 1,534,554
$4,219,841 $4,098,363
</TABLE>
See accompanying notes to consolidated financial statements.
4
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31
thousands 2000 1999
<S> <C> <C>
Cash Flow from Operating Activities
Net income (loss) $ 41,799 $(20,355)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation, depletion and amortization 57,308 56,524
Amortization of restricted stock 393 315
Interest expense - zero coupon debentures 804 --
Deferred U.S. income taxes 24,603 (10,765)
Impairments of international properties -- 20,000
124,907 45,719
(Increase) decrease in accounts receivable (17,875) 30,081
(Increase) decrease in inventories 13,957 (7,726)
Decrease in accounts payable - trade and
other and accrued expenses (88,136) (67,642)
Other items - net (21,010) (5,637)
Net cash provided by (used in) operating
activities 11,843 (5,205)
Cash Flow from Investing Activities
Additions to properties and equipment (184,011) (111,758)
Sales and retirements of properties
and equipment 151 105
Proceeds from the sale of assets to be
leased, net -- 3,777
Net cash used in investing activities (183,860) (107,876)
Cash Flow from Financing Activities
Additions to debt 344,724 300,000
Retirements of debt (215,633) (164,630)
Decrease in accounts payable, banks (1,870) (18,310)
Dividends paid (9,133) (8,757)
Issuance of common stock 18,529 3,300
Net cash provided by financing activities 136,617 111,603
Net Decrease in Cash and Cash Equivalents (35,400) (1,478)
Cash and Cash Equivalents at Beginning
of Period 44,769 17,008
Cash and Cash Equivalents at End of Period $ 9,369 $ 15,530
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
<PAGE> Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Summary of Accounting Policies
General Anadarko Petroleum Corporation is engaged in the
exploration, development, production and marketing of natural gas,
crude oil, condensate and natural gas liquids (NGLs). The terms
"Anadarko" and "Company" refer to Anadarko Petroleum Corporation and
its subsidiaries. The principal subsidiaries of Anadarko are: Anadarko
Algeria Corporation, Anadarko Energy Services Company and Anadarko
Gathering Company.
2. Inventories Materials and supplies and natural gas inventories
are stated at the lower of average cost or market. Natural gas, when
sold from inventory, is charged to expense using the average cost
method. Oil, due from third-parties, is stated at market value. The
major classes of inventories are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
thousands 2000 1999
<S> <C> <C>
Oil, due from third-parties $12,672 $24,659
Materials and supplies 13,108 14,171
Natural gas, stored in inventory 6,353 7,260
$32,133 $46,090
</TABLE>
3. Properties and Equipment Oil and gas properties include costs of
$330,865,000 and $323,019,000 at March 31, 2000 and December 31, 1999,
respectively, which were excluded from capitalized costs being
amortized. These amounts represent costs associated with unevaluated
properties and major development projects.
4. Long-term Debt A summary of long-term debt follows:
<TABLE>
<CAPTION>
March 31, December 31,
thousands 2000 1999
<S> <C> <C>
Commercial Paper $ 162,369 $ 198,322
Notes Payable, Banks 65,000 145,000
8 1/4% Notes due 2001 100,000 100,000
6 3/4% Notes due 2003 100,000 100,000
5 7/8% Notes due 2003 100,000 100,000
Zero Coupon Convertible
Debentures due 2020 345,528 --
7 1/4% Debentures due 2025 320 100,000
7% Debentures due 2027 100,000 100,000
6.625% Debentures due 2028 100,000 100,000
7.20% Debentures due 2029 300,000 300,000
7.73% Debentures due 2096 100,000 100,000
7 1/4% Debentures due 2096 100,000 100,000
$1,573,217 $1,443,322
</TABLE> 6
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
4. Long-term Debt (continued)
The commercial paper and notes payable to banks have been classified as
long-term debt in accordance with Statement of Financial Accounting
Standards No. 6, "Classification of Short-term Obligations Expected to
be Refinanced," under the terms of Anadarko's Bank Credit Agreements.
In March 2000, Anadarko issued $345,000,000 of Zero Coupon Convertible
Debentures due March 2020, with a face value at maturity of
$690,000,000. The Debentures were issued at a discount and accrue
interest at 3.50% annually until reaching face value at maturity;
however, interest will not be paid prior to maturity. The Debentures are
convertible into common stock at the option of the holder at any time at
a fixed conversion rate. A holder has the right to require Anadarko to
repurchase a Debenture at a specified price in March 2003, 2008 and
2013. The Debentures are redeemable at the option of Anadarko after
three years. The net proceeds from the offering were used to repay
floating interest rate debt.
In April 2000, the Company entered into a 364-Day Credit Agreement. The
364-Day Credit Agreement provides for $300,000,000 principal amount and
expires in 2001.
5. Preferred Stock For the first quarter of 2000 and 1999,
dividends of $13.65 per share (equivalent to $1.365 per Depositary
Share) were paid to holders of preferred stock.
6. Common Stock Under the most restrictive provisions of the
Company's credit agreements, which limit the payment of dividends,
retained earnings of $796,146,000 and $763,480,000 were not restricted
as to the payment of dividends at March 31, 2000 and December 31, 1999,
respectively.
The Company's basic earnings per share (EPS) amounts have been computed
based on the average number of common shares outstanding. Diluted EPS
amounts include the effect of the Company's outstanding stock options
under the treasury stock method and the net effect of the assumed
conversion of the convertible debentures.
7
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Common Stock (continued)
The reconciliation between basic and diluted EPS is as follows:
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 2000 March 31, 1999
thousands except Per Share Per Share
per share amounts Income Shares Amount Loss Shares Amount
<S> <C> <C> <C> <C> <C> <C>
Basic EPS
Income (loss) available
to common stockholders $39,069 128,046 $0.31 $(23,085) 120,492 $(0.19)
Effect of convertible
debentures 515 2,675 -- --
Effect of dilutive
stock options -- 743 -- --
Diluted EPS
Income (loss) available
to common stockholders
plus assumed conversion $39,584 131,464 $0.30 $(23,085) 120,492 $(0.19)
</TABLE>
For the three months ended March 31, 2000 and 1999, options for
3,189,000 and 4,463,000, respectively, shares of common stock were
excluded from the diluted EPS calculation because the options' exercise
price was greater than the average market price of common stock for the
periods. For the three months ended March 31, 1999, there were 735,000
common stock equivalents related to outstanding stock options that were
excluded from the computation of diluted EPS, since they had an anti-
dilutive effect.
7. Statement of Cash Flows Supplemental Information The amounts
of cash paid (received) for interest (net of amounts capitalized) and
income taxes are as follows:
<TABLE>
<CAPTION>
Three Months Ended
March 31
thousands 2000 1999
<S> <C> <C>
Interest $24,525 $19,361
Income taxes $ 1,771 $ (198)
</TABLE>
8. Kansas Ad Valorem Tax The Natural Gas Policy Act of 1978 allowed
a "severance, production or similar" tax to be included as an add-on,
over and above the maximum lawful price for natural gas. Based on the
Federal Energy Regulatory Commission (FERC) ruling that the Kansas ad
valorem tax was such a tax, the Company collected the Kansas ad valorem
tax.
Background of Present Litigation FERC's ruling regarding the ability
of producers to collect the Kansas ad valorem tax was appealed to the
United States Court of Appeals for the District of Columbia Circuit
(D.C. Circuit). The Court held in June 1988 that FERC failed to provide
a reasoned basis for its findings and remanded the case to FERC.
8
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
8. Kansas Ad Valorem Tax (continued)
Ultimately, the D.C. Circuit issued a decision on August 2, 1996 ruling
that producers must refund all Kansas ad valorem taxes collected
relating to production since October 1983. The Company filed a petition
for writ of certiorari with the Supreme Court. That petition was denied
on May 12, 1997.
Anadarko estimates that the maximum amount of principal and interest at
issue which has not been paid to date, assuming that the October 1983
effective date remains in effect, is about $47,127,000 (pretax) as of
March 31, 2000.
FERC Proceedings Depending on future FERC orders, the Company could
be required to pay all or part of the amounts claimed by all pipelines
(which might include PanEnergy Corp) pending further potential review by
FERC or the courts.
PanEnergy Litigation On May 13, 1997, the Company filed a lawsuit in
the Federal District Court for the Southern District of Texas against
PanEnergy seeking declaration that pursuant to prior agreements Anadarko
is not required to issue refunds to PanEnergy for the principal amount
of $14,003,000 (pretax) and, if the petition for adjustment is denied in
its entirety by FERC with respect to PanEnergy refunds, interest in an
amount of $31,349,000 (pretax) as of March 31, 2000. The Company also
seeks from PanEnergy the return of $816,000 of the $830,000 (pretax)
charged against income in 1993 and 1994. In response to a motion filed
by PanEnergy, the United States District Court issued an order on
March 17, 1998 staying the litigation, pending the exercise by FERC of
its regulatory jurisdiction.
FERC Order of October 13, 1998 On October 13, 1998, FERC issued a
final order on Anadarko's complaint. The order declares that Anadarko
Production Company (now an affiliate of Duke Energy) is responsible as
first seller for making refunds of Kansas ad valorem tax reimbursements
collected from 1983 through August 1, 1985. The Company estimates this
amount to be as much as $17,070,000. The Company is responsible to make
refunds for reimbursements it collected as first seller from August 1,
1985 through 1988. On February 23, 2000, FERC clarified its prior order
stating the Company must, in the first instance, make refunds for former
subsidiaries of Anadarko Production Company. The Company estimates this
amount to be as much as $27,805,000. The FERC order states that whether
Anadarko Production Company or the Company is entitled to reimbursement
from another party for the refunds ordered is a matter to be pursued in
an appropriate judicial forum. On January 15, 1999, FERC issued an order
9
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
8. Kansas Ad Valorem Tax (continued)
denying a request for rehearing filed by PanEnergy and reaffirming the
October 1998 order. FERC may, in the near future, issue an order based
upon the above allocation regarding when the refunds must be paid and
the specific refund amount. The issue of reimbursement will now be
pursued in U.S. District Court. On April 16, 1999, the U.S. District
Court ordered the parties to mediation. One session with the mediator
has been held. The Court has also set the matter for trial on the
November/December 2000 trial term. Supplemental motions for summary
judgment have been filed by both parties.
Kansas Corporation Commission (KCC) Proceeding On April 30, 1998,
the Company's subsidiary, Anadarko Gathering Company (AGC), filed a
petition with the KCC to clarify AGC's rights and obligations, if any,
related to the payment by first sellers of Kansas ad valorem tax
refunds. The refunds at issue relate to sales made by Anadarko
Production Company, a PanEnergy affiliate, through facilities known as
the Cimmaron River System during the time period from 1983 to 1988. AGC
purchased the Cimmaron River System from Centana, the successor of
Anadarko Production Company, in 1995. The petition, among other things,
asks the KCC to determine whether AGC or Anadarko Production Company is
responsible for the payment or distribution of refunds received from
first sellers to Anadarko Production Company's former customers and
requests guidance concerning the disposition of refunds received that
are attributable to sales made to Anadarko Production Company customers
that did not reimburse Anadarko Production Company for Kansas ad valorem
taxes during the relevant time periods. On June 1, 1999, the KCC entered
an order approving the plan proposed by AGC. Under this order, after the
conclusion of all litigation related to Kansas ad valorem tax
proceedings, "AGC shall be authorized to deduct from the amounts of
refunds due for the period from 1986 to and through 1988 all amounts
shown not to have been collected by AGC's predecessor in interest,
Centana Energy Corporation by year, for the period from 1986 through
1988." The order is now final.
Anadarko's net income for 1997 included a $1,800,000 charge (pretax)
related to the Kansas ad valorem tax refunds. This charge reflects all
principal and interest which may be due at the conclusion of all
regulatory proceedings and litigation to parties other than PanEnergy.
The Company is unable at this time to predict the final outcome of this
matter and no provision for liability (excluding amounts recorded in
1993, 1994 and 1997) has been made in the accompanying financial
statements.
10
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<PAGE>
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
9. The information, as furnished, reflects all normal recurring
adjustments that are, in the opinion of management, necessary to a fair
statement of financial position as of March 31, 2000 and December 31,
1999, the results of operations for the three months ended March 31,
2000 and 1999 and cash flows for the three months ended March 31, 2000
and 1999.
10. Pending Merger Transaction On April 2, 2000, Anadarko and Union
Pacific Resources Group Inc. (UPR) entered into an Agreement and Plan
of Merger. Subject to the terms and conditions set forth in the
agreement, UPR will be merged with and into a subsidiary of Anadarko
and UPR shareholders will receive 0.4550 Anadarko common shares for each
UPR common share they own. As a result following completion of the
merger, Anadarko shareholders will hold approximately 53% of the combined
company and UPR shareholders will hold approximately 47%. The stock-
for-stock deal is subject to approval by shareholders of both UPR and
Anadarko, satisfaction of conditions and customary regulatory approvals.
Following the merger, UPR will be a wholly-owned subsidiary of Anadarko.
Anadarko expects the merger to be treated as a tax-free reorganization
and accounted for as a purchase. In connection with the execution of the
merger agreement, UPR and Anadarko granted each other the right to
purchase 19.9% of each other's outstanding shares.
11
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Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
The Company has made in this report, and may from time to time otherwise
make in other public filings, press releases and discussions with
Company management, forward looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 concerning the Company's operations,
economic performance and financial condition. These forward looking
statements include information concerning future production and
reserves, schedules, plans, timing of development, contributions from
oil and gas properties, and those statements preceded by, followed by or
that otherwise include the words "believes", "expects", "anticipates",
"intends", "estimates", "projects", "target", "goal", "plans",
"objective", "should" or similar expressions or variations on such
expressions. For such statements, the Company claims the protection of
the safe harbor for forward looking statements contained in the Private
Securities Litigation Reform Act of 1995. Such statements are subject to
various risks and uncertainties, and actual results could differ
materially from those expressed or implied by such statements due to a
number of factors in addition to those discussed elsewhere in this Form
10-Q and in the Company's other public filings, press releases and
discussions with Company management. Anadarko undertakes no obligation
to publicly update or revise any forward-looking statements. See
Additional Factors Affecting Business in the Management's Discussion and
Analysis of Financial Condition and Results of Operations included in
the Company's 1999 Annual Report on Form 10-K.
Overview of Operating Results
For 2000's first quarter, Anadarko reported net income available to
common stockholders of $39.1 million, or 31 cents per share (basic), on
revenues of $247 million. By comparison, during 1999's first quarter,
Anadarko had a net loss of $23.l million, or 19 cents per share (basic),
on $136 million of revenues. The loss in the first quarter of 1999
reflected a non-cash charge of $20 million before taxes ($12.8 million
after taxes) related to operations in Eritrea. Excluding the
international impairment, the Company's net loss for the first quarter
of 1999 was $10.3 million, or 8 cents per share (basic).
The improved revenues and earnings in the first three months of 2000
compared to the same period in 1999 were due primarily to the
significant improvement in commodity prices, partially offset by higher
operating expenses, administrative and general costs, and interest
expense.
12
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
The following table shows the Company's volumes and average prices for
the three months ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
Three Months Ended
March 31
2000 1999
<S> <C> <C>
Natural gas
Bcf 44.3 44.0
MMcf/d 486 489
Price per Mcf $ 2.46 $ 1.59
Crude oil and condensate
United States
MBbls 1,847 2,324
MBbls/d 20 26
Price per barrel $24.72 $ 9.92
Algeria
MBbls 1,967 1,644
MBbls/d 22 18
Price per barrel $27.87 $11.57
Total
MBbls 3,814 3,968
MBbls/d 42 44
Price per barrel $26.34 $10.60
Natural gas liquids
MBbls 2,006 1,632
MBbls/d 22 18
Price per barrel $20.73 $ 8.60
Total Energy Equivalent
Barrels (MMEEBs) 13.2 12.9
</TABLE>
Bcf - billion cubic feet
MBbls - thousand barrels
MBbls/d - thousand barrels per day
Mcf - thousand cubic feet
MMcf/d - million cubic feet per day
MMEEBs - million energy equivalent barrels
Costs and expenses during the first quarter of 2000 were $141.7
million, an increase of 14% compared to $124.2 for the first quarter of
1999 (excluding the impairment). The increase is primarily due to
increases in operating expenses associated with processing natural gas
liquids (NGLs) volumes and administrative and general expenses
associated with increased employee benefits.
Interest expense for the first quarter of 2000 was $21.1 million, an
increase of 13% compared to $18.6 million for the first quarter of
1999. The increase was primarily due to higher interest rates in 2000.
13
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Natural Gas Volumes and Prices During the first quarter of 2000,
Anadarko's natural gas production was essentially level with 1999's same
period. Increases in production from the Bossier gas play were offset
by production declines in the Gulf of Mexico. The Company's wellhead
price for natural gas was $2.46 per thousand cubic feet (Mcf) for the
first three months of 2000, up 55% from $1.59 per Mcf for the first
three months of 1999.
Crude Oil, Condensate and Natural Gas Liquids Volumes and Prices
Anadarko's oil production for the first three months of 2000 averaged
42,000 barrels of oil per day (BOPD) compared to 44,000 BOPD in 1999's
first quarter. Anadarko's average oil price for the first quarter of
2000 was $26.34 per barrel, up 148% from $10.60 per barrel for the first
quarter of 1999.
In the first three months of 2000, the Company's NGLs sales volumes
averaged 22,000 barrels per day, a 22% increase from 18,000 barrels per
day in the first three months of 1999. The Company's average price for
NGLs was $20.73 per barrel in the first quarter of 2000, up 141% from
$8.60 per barrel in the first three months of 1999.
Capital Expenditures, Liquidity and Dividends
During the first quarter of 2000, Anadarko's capital spending
(including capitalized interest and overhead) was $184.0 million
compared to $111.8 million in the first quarter of 1999.
The Company believes that cash flows and existing or available credit
facilities will provide the majority of funds to meet its capital and
operating requirements for 2000. The Company will continue to evaluate
funding alternatives, including property sales and additional
borrowing, to secure other funds for capital development.
In March 2000, Anadarko issued $345 million of Zero Coupon Convertible
Debentures due March 2020, with a face value at maturity of $690
million. The Debentures were issued at a discount and accrue interest at
3.50% annually until reaching face value at maturity; however, interest
will not be paid prior to maturity. The Debentures are convertible into
common stock at the option of the holder at any time at a fixed
conversion rate. A holder has the right to require Anadarko to
repurchase a Debenture at a specified price in March 2003, 2008 and
2013. The Debentures are redeemable at the option of Anadarko after
three years. The net proceeds from the offering were used to repay
floating interest rate debt.
In April 2000, the Company entered into a 364-Day Credit Agreement. The
364-Day Credit Agreement provides for $300 million principal amount and
expires in 2001.
14
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Pending Merger Transaction
On April 2, 2000, Anadarko and Union Pacific Resources Group Inc.
(UPR) entered into an Agreement and Plan of Merger. Subject to the
terms and conditions set forth in the agreement, UPR will be merged
with and into a subsidiary of Anadarko and UPR shareholders will
receive 0.4550 Anadarko common shares for each UPR common share they
own. As a result following completion of the merger, Anadarko
shareholders will hold approximately 53% of the combined company and
UPR shareholders will hold approximately 47%. As a result of the
merger, on a combined basis as of year-end 1999, the combined companies
would have had a total capitalization of $10 billion, comprised of $5.9
billion of equity and $4.1 billion of debt. The debt to total
capitalization ratio would be 41%. The Company believes that the
additional debt related to the merger will not adversely affect
Anadarko's ongoing operations. The stock-for-stock deal is subject to
approval by shareholders of both UPR and Anadarko, satisfaction of
conditions and customary regulatory approvals. Following the merger,
UPR will be a wholly-owned subsidiary of Anadarko. Anadarko expects the
merger to be treated as a tax-free reorganization and accounted for as
a purchase. In connection with the execution of the merger agreement,
UPR and Anadarko granted each other the right to purchase 19.9% of each
other's outstanding shares.
Exploration and Development Activities
During the first quarter of 2000, Anadarko drilled or participated in
a total of 119 wells, including 42 oil wells, 73 gas wells and 4 dry
holes. This compares to a total of 55 wells in the first quarter of
1999, including 21 oil wells, 21 gas wells and 13 dry holes. Following
is a description of activity during the quarter.
Onshore - Lower 48 States
Bossier Sand Play In terms of both production growth and
operational efficiency, Anadarko continues to achieve strong results
from its most active onshore domestic program. At the end of the first
quarter, the Company's net natural gas volumes from the Bossier Sand
Play were 135 MMcf/d, more than three times higher than production
levels at the same time a year ago. Over that same period, the number
of rigs in operation has increased from eight to 21. Of the 130 Bossier
wells the Company has completed since 1996, only one has been a dry
hole.
During the first quarter, Anadarko spudded its first well in the Vernon
Field of Jackson Parish, Louisiana. In addition, the Company has
approved a five-well development program.
15
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
The Company reported results from the first significant producers in
the Dowdy Ranch Field, a new development area northeast of the Dew and
Mimms Creek Fields in Freestone County. The Burgher B-1 well tested 9.2
MMcf/d of gas and the Swank A-1 tested 2.5 MMcf/d of gas. Other
completions of note from the first quarter include:
- Stephens A-4 (6.9 MMcf/d of gas), Dew Field
- Alma Moore No. 8 (6.4 MMcf/d of gas), Mimms Creek Field
- Burgher C-1 (6.3 MMcf/d of gas), Dowdy Ranch Field
- Burgher G-1 (6.1 MMcf/d of gas), Dowdy Ranch Field
- High A-10 (5.5 MMcf/d of gas), Dew Field
- Turner A-4 (5.5 MMcf/d of gas), Dew Field
- High A-8 (5.3 MMcf/d of gas), Dew Field
Anadarko owns a 100% working interest in each of these wells.
Hugoton Embayment First quarter activity in southwest Kansas was
highlighted by the Company's fifth success out of six wells it has
drilled as part of the Hugoton Joint Venture program with Mobil. The
HJV Miller A-1 well in Stevens County, Kansas, tested 1.3 MMcf/d of gas
after being completed as a Lower Morrow producer. The Company owns a
100% working interest in the well. Combined production from the first
five producers was 3 MMcf/d of gas at the end of the first quarter.
Since signing the four-year joint venture agreement in 1997, Anadarko
and Mobil have been working together to explore the deeper horizons in
this traditionally shallow field.
Along the Stevens/Morton County line in Kansas, the Company completed
its fourth successful producer in the Simmons Field during the first
quarter. The Jenkins C-3 was producing at a rate of 14.3 MMcf/d of gas
from the Upper Morrow sand at the end of the first quarter. Anadarko
has a 100% working interest in the well.
Also in Morton County, Kansas, Anadarko announced the successful
recompletion of the USA Barker No. A-3 well during January. The
Berryman Richfield Field producer tested 2.2 MMcf/d of gas after being
recompleted to the Wabaunsee and Topeka intervals. The Company owns a
100% working interest in the well.
Texas Panhandle As part of a comprehensive infill drilling program
in the West Panhandle Field of Moore County, Texas, Anadarko completed
the Brown B-6034R well. The shallow Red Cave well tested 1.9 MMcf/d of
gas. The Company has a 100% working interest in the well.
Permian Basin Activity in two separate waterflood programs launched
in 1999 continued at a steady pace in the first quarter of 2000. In the
Snyder Field of Howard County, Texas, Anadarko reported results from
three wells. The Susie B. Snyder No. 2042 and No. 2031 tested at a
combined rate of 172 BOPD from the San Angelo and Clearfork formations,
while the No. 2731 well produced 66 BOPD from the San Angelo Formation.
Anadarko owns a 100% working interest in each of these wells, which are
part of a 27-well program that began in 1999. An additional 61-well
program was approved during the first quarter and is now in progress.
16
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
In the Revilo Field of Scurry County, Texas, another core waterflood
area for Anadarko, the Company completed a 13-well drilling program
that commenced in late 1999. During the first quarter, Anadarko
reported three significant completions from this program: combined
production from the R.W. Boyd No. 15 and 17 wells was 136 BOPD, while
the R.W. Boyd No. 14 well tested 71 BOPD. The Company has a 100%
working interest in the wells.
After the recent extension of the North Shugart Field in Eddy County,
New Mexico, Anadarko had two successful recompletions during the first
quarter. The Paton "B" Federal No. 2 encountered 285 feet of pay in the
Bone Spring Formation after being drilled to a total depth of 9,000
feet and is currently producing 179 BOPD and 117 thousand cubic feet
per day (Mcf/d) of gas. Other pay intervals behind the pipe have yet to
be tested. In addition, the Baish Federal No. 8 well was drilled to a
total depth of 9,030 feet and encountered 254 feet of net pay in the
same Bone Spring interval. Current production from the well is 214 BOPD
and 205 Mcf/d of gas. The Company has a 100% working interest in each
of these wells. Anadarko has also drilled six other Bone Spring wells
that are in various stages of completion and initial results are
encouraging. The Company holds about 1,200 acres in the North Shugart
Field, which is located about 60 miles southeast of Roswell, New
Mexico. Production from the field is 700 BOPD and 600 Mcf/d of gas - a
ten-fold increase in volumes prior to the start of the program.
Offshore - Gulf of Mexico
Sub-salt Following successful results from the second
development/delineation well, Anadarko has increased the area of known
reserves at the Hickory Field. The Grand Isle Block 116 No. 2 well
encountered main field pay zones down-dip of the original discovery
well (Grand Isle 116 No. 1) drilled in 1998, about one mile to the
north. The Company has drilled the second delineation well and will now
drill the fourth well in the field to delineate the reservoir. A
separate exploration well has been approved for Grand Isle Block 111
and will begin drilling once the work on Block 116 is completed.
Construction of the Hickory platform continued during the first quarter
in Houma, Louisiana and is on schedule for installation during the
summer of 2000. First production should begin in the fourth quarter of
2000. Anadarko serves as operator and has a 50% working interest.
Fabrication continues on the jacket and production deck that will be
used to develop the Tanzanite discovery (Eugene Island 346), offshore
Louisiana. The platform is on schedule for installation during the
summer of 2000. Meanwhile, the Company continues its drilling and
seismic processing program to further delineate the field. First
production is expected to begin in the fourth quarter of 2000. Anadarko
holds a 100% working interest in the Tanzanite project.
17
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
In the Agate Field (Ship Shoal Block 361), Anadarko completed a
replacement well during the first quarter, thus restoring production
that had been disrupted since May 1999. The well is currently flowing
5.1 MMcf/d of gas and 310 barrels of condensate per day (BCPD) with
production tied-back via a sub-sea completion to the Mahogany platform
(Ship Shoal Block 349/359), which is six miles to the east. Anadarko
has a 50% working interest in the Agate Field.
Conventional Two wells were successfully recompleted at the High
Island 376 "B" platform, one of Anadarko's conventional projects in the
Gulf of Mexico. The B-1 well tested 1,744 BOPD and 2.2 MMcf/d of gas
after being recompleted to the Basal Nebraskan (BN)-4 interval. The
High Island 376 B-3 well was recompleted to the BN-3 interval, testing
21 MMcf/d of gas and 1,622 BCPD. Anadarko owns a 34% working interest
in the field and serves as operator.
The East Cameron Block 347 No. 1 well, which discovered a natural gas
accumulation above salt at the Garnet prospect offshore Louisiana, was
completed during the first quarter and is currently producing 20 MMcf/d
of gas and 390 BCPD. Production was tied-back to East Cameron 359 three
miles to the south through a sub-sea completion. The Company has a 100%
working interest in the Garnet prospect.
At the Matagorda Island 622/623 Complex, during the first quarter
Anadarko successfully completed the C-7 well, increasing gross field
production from 215 MMcf/d to 295 MMcf/d of gas. A second well is
currently drilling. The Company owns a 37.5% working interest in the
complex.
Deepwater In April 2000, Anadarko announced initial results from
the Marco Polo prospect, its first Company-operated deepwater project
in the Gulf of Mexico. The Green Canyon Block 608 No. 1 well
encountered 320 feet of oil pay in two major intervals while being
drilled to its current depth of 13,225 feet. Additional delineation
drilling will be required to determine the commerciality of the field.
A sidetrack well to the Green Canyon 608 No. 1 well is now being
drilled. The Company owns a 100% working interest in the Marco Polo
prospect, which is located 160 miles off the Louisiana coast in 4,300
feet of water.
Lease Sale Anadarko strengthened its acreage position in the
central Gulf of Mexico during the first quarter after participating in
the federal Outer Continental Shelf (OCS) Lease Sale No. 175 conducted
by the Minerals Management Service (MMS). Working alone and with
partners, Anadarko was the apparent high bidder for 33 blocks
representing a net investment to the Company of $24.9 million. The
tracts cover 166,482 acres (gross) and include a mix of traditional
shallow water areas and non-traditional plays such as the sub-salt and
deepwater. Water depth of the blocks range from 229 feet to 4,400 feet.
All bids are subject to review and final approval by the MMS.
18
<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations (continued)
Alaska
Preparation for first production from the Alpine Field on the North
Slope continued in the first quarter. Construction of the modules has
been completed and the various components have been delivered to the
development site. Overall, the project is about 85% complete. Initial
production of 40,000 BOPD (gross) is slated to begin in the third
quarter of 2000. Anadarko has a 22% working interest in the field.
During the winter season, the Company and its partners completed
drilling on four prospects (Nanuk, Clover, Rendezvous and Spark).
Results have not been released pending evaluation and further study.
International
Algeria Efforts during the first quarter were primarily focused on
continued development of the Company's discoveries on Block 404.
Construction of Stage II facilities is underway at the Hassi Berkine
South (HBNS) Field and when completed should increase gross production
capacity from 60,000 BOPD to 135,000 BOPD beginning in 2001.
Construction has now begun on a third production train to develop the
Hassi Berkine (HBN) Field, which is expected to add an additional
75,000 BOPD of gross production capacity in 2002.
In the first three months of 2000, Anadarko reported results on a
number of water injection projects that will help enhance recovery from
the HBNS and Ourhoud Fields. The HBNS-23 well was completed after being
drilled to a total depth of 11,170 feet. Water injection operations
commenced following the connection of the HBNS-23 and HBNS-22 wells to
the distribution system. At the southern end of Block 404, the QB-9
well was drilled to a total depth of 11,748 and suspended as a planned
water injector awaiting completion.
In March, the HBNS-29 was completed as an oil producer after being
drilled to a total depth of 11,068 feet.
New Accounting Principles
Accounting for Derivatives Statement of Financial Accounting
Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities," provides guidance for accounting for derivative
instruments and hedging activities. In July 1999, SFAS No. 137,
"Deferral of the Effective Date of FASB Statement No. 133," was issued
and delays the effective date for one year, to fiscal years beginning
after June 15, 2000. The Company is evaluating the impact of the
provisions of SFAS No. 133.
19
<PAGE>
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Use of Derivatives Anadarko produces, purchases and sells natural
gas, crude oil and NGLs. As a result, Anadarko's financial results can
be significantly affected by changes in these commodity prices.
Anadarko uses derivative commodity instruments to hedge the Company's
exposure to changes in the market price of natural gas and crude oil,
and to provide methods to fix the price for natural gas independently
of the physical purchase or sale. Derivative commodity instruments also
provide methods to meet customer pricing requirements while achieving a
price structure consistent with the Company's overall pricing strategy.
While derivative commodity instruments are intended to reduce the
Company's exposure to declines in the market price of natural gas and
crude oil, the derivative commodity instruments may also limit
Anadarko's gain from increases in the market price of natural gas and
crude oil. As a result, gains and losses on derivative commodity
instruments are generally offset by similar changes in the realized
price of natural gas and crude oil. Gains and losses are recognized in
revenues for the periods to which the derivative commodity instruments
relate. In the event of a loss of correlation between oil and gas
reference prices for a derivative commodity instrument and actual oil
and gas prices, gains or losses for the amount the instrument has not
offset the change in actual prices are recognized in the period.
Occasionally, the Company may enter into derivative commodity
instruments for trading purposes with the objective of generating
profits on or from exposure to shifts or changes in the market price of
natural gas and crude oil. These trading activities do not qualify as
hedges of production and are marked to market in the period. Trading
gains or losses are recorded with revenues from the corresponding
product. Anadarko's derivative commodity instruments currently are
comprised of futures, swaps and options contracts.
While the volume of derivative commodity instruments utilized by the
Company to hedge its market price risk can vary during the year within
the boundaries of its established policy guidelines, the fair value of
those instruments at March 31, 2000 and December 31, 1999 was, in the
judgment of the Company, immaterial. Additionally, through the use of
sensitivity analysis, the Company evaluates separately, for its non-
trading and trading activities, the potential effect that reasonably
possible near term changes in the market prices of natural gas and
crude oil may have on the fair value of the Company's derivative
commodity instruments. Based upon an analysis utilizing the actual
derivative contractual volumes and assuming a 10% adverse movement in
commodity prices, the potential decrease in the fair value of the
derivative commodity instruments at March 31, 2000 and December 31,
1999 does not have a material adverse effect on the financial position
or results of operations of the Company.
20
<PAGE>
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Anadarko is also exposed to risk resulting from changes in interest
rates as a result of the Company's variable and fixed interest rate debt
as well as fixed to floating interest rate swaps. The Company has
evaluated the potential effect that reasonably possible near term
changes in interest rates may have on the fair value of the Company's
various debt instruments and its interest rate swap agreements. Based
upon an analysis, utilizing the actual interest rates in effect as of
March 31, 2000 and December 31, 1999 and assuming a 10% increase in
interest rates, the potential decrease in the fair value of the
derivative interest swap instruments at March 31, 2000 and December 31,
1999 does not have a material effect on the financial position or
results of operations of the Company.
21
<PAGE>
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Kansas Ad Valorem Tax See Note 8 of the Notes to Consolidated
Financial Statements under Part I. Financial Information of this Form 10-Q.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibits not incorporated by reference to a prior filing are
designated by an asterisk (*) and are filed herewith; all exhibits
not so designated are incorporated herein by reference to a prior
filing as indicated.
<TABLE>
<CAPTION>
Exhibit Original Filed File
Number Description Exhibit Number
<S> <C> <C> <C>
2(a) Agreement and Plan of Merger 2.1 to Form 8-K dated 1-8968
dated as of April 2, 2000, April 2, 2000
among Anadarko, Subcorp and
UPR
(b) Amendment No. 1 to Rights 2.4 to Form 8-K dated 1-8968
Agreement, dated as of April 2, 2000
April 2, 2000, between
Anadarko and Rights Agent
3(a) Restated Certificate of 19(a)(i) to Form 10-Q 1-8968
Incorporation of Anadarko for quarter ended
Petroleum Corporation, September 30, 1986
dated August 28, 1986
(b) Amendment to the Restated 3(b) to Form 10-Q 1-8968
Certificate of Incorporation for quarter ended
of Anadarko Petroleum March 31, 1999
Corporation, dated
April 29, 1999
(c) Certificate of Correction 3(c) to Form 10-Q 1-8968
filed to correct the for quarter ended
Amendment to the Restated June 30, 1999
Certificate of Incorporation
of Anadarko Petroleum
Corporation, dated
June 15, 1999
(d) By-laws of Anadarko 3(b) to Form 10-Q 1-8968
Petroleum Corporation, for quarter ended
as amended June 30, 1996
*4(a) 364-Day Credit Agreement,
dated as of April 14, 2000
</TABLE>
22
<PAGE>
<PAGE>
Item 6. Exhibits and Reports on Form 8-K (continued)
<TABLE>
<CAPTION>
Exhibit Original Filed File
Number Description Exhibit Number
<S> <C> <C> <C>
*12 Computation of Ratios of
Earnings to Fixed Charges
and Earnings to Combined
Fixed Charges and Preferred
Stock Dividends
*27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
A report on Form 8-K dated March 7, 2000 was filed in which the
earliest event reported was March 7, 2000. This event was reported
under Item 5, "Other Events" and Item 7, "Financial Statements and
Exhibits".
23
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned duly authorized officer and principal financial
officer.
ANADARKO PETROLEUM CORPORATION
(Registrant)
May 12, 2000 By: [MICHAEL E. ROSE]
Michael E. Rose - Senior Vice President,
Finance and Chief Financial Officer
<PAGE>
<PAGE>
EXHIBIT 4(a)
[EXECUTION COPY]
ANADARKO PETROLEUM CORPORATION
364-Day Credit Agreement
Dated as of April 14, 2000
$300,000,000
TABLE OF CONTENTS
Page
ARTICLE 1 Definitions and Accounting Terms
Section 1.01. Defined Terms 1
Section 1.02. Use of Defined Terms 9
Section 1.03. Accounting Terms 10
ARTICLE 2 Amount and Terms of Loans
Section 2.01. Loans 10
Section 2.02. Notes 10
Section 2.03. Procedure for Borrowing 11
Section 2.04. Fees 11
Section 2.05. Reduction, Termination or Extension
of Commitments 12
Section 2.06. Optional Prepayments 13
Section 2.07. Mandatory Prepayments 14
Section 2.08. Repayment of Loans 14
Section 2.09. Interest Rate 14
Section 2.10. Computation of Interest and Fees 14
Section 2.11. Pro Rata Treatment and Payments 15
Section 2.12. Increased Cost of Loans 17
Section 2.13. Illegality 18
Section 2.14. Withholding Tax Exemption 19
Section 2.15. Substitute Loan Basis 20
Section 2.16. Certain Prepayments or Conversions
Pursuant to Sections 2.12 and 2.13 21
Section 2.17. Certain Notices 22
Section 2.18. Use of Proceeds 22
Section 2.19. Indemnity 22
Section 2.20. Minimum Amounts of Tranches 22
Section 2.21. Conversion and Continuation Options 23
Section 2.22. Increase of Commitments 23
ARTICLE 3 Representations and Warranties
Section 3.01. Representations and Warranties by
the Company 26
ARTICLE 4 Covenants of the Company
Section 4.01. Covenants 27
ARTICLE 5 Conditions of Lending
Section 5.01. Conditions Precedent to The Initial
Loans 30
Section 5.02. Conditions Precedent to Loans 32
ARTICLE 6 Events of Default
Section 6.01. Events of Default 33
ARTICLE 7 The Agents, Lead Arranger and Book Manager
Section 7.01. Powers 35
Section 7.02. Administrative Agent=s Reliance,
Etc 35
Section 7.03. No Responsibility for Recitals, Etc 35
Section 7.04. Right to Indemnity 35
Section 7.05. Action on Instructions of Banks 36
Section 7.06. Employment of Agents 36
Section 7.07. Reliance on Documents 36
Section 7.08. Rights as Banks 36
Section 7.09. Non-reliance on Agents or Other
Banks 37
Section 7.10. Events of Default 37
Section 7.11. Successor Administrative Agent 37
Section 7.12. Syndication and Documentation
Agents, Lead Arranger and Book Manager 38
ARTICLE 8 Miscellaneous
Section 8.01. Modifications, Consents and Waivers 38
Section 8.02. Confidentiality 38
Section 8.03. Addresses for Notices 39
Section 8.04. Costs, Expenses and Taxes 39
Section 8.05. Binding Effect and Assignment 40
Section 8.06. Termination and Substitution of
Bank 40
Section 8.07. Governing Law 41
Section 8.08. Headings 41
Section 8.09. Execution in Counterparts 41
PRICING SCHEDULE 45
EXHIBIT A Form of Note 47
SCHEDULE A Loans and Payments 49
EXHIBIT B Extension Agreement 50
EXHIBIT C Form of New Bank Agreement 52
EXHIBIT D Form of Commitment Increase Agreement 56
364-DAY CREDIT AGREEMENT
Dated as of April 14, 2000
ANADARKO PETROLEUM CORPORATION, a Delaware
corporation (the "Company"), the Banks listed under
ACommitment@ in Section 1.01 (individually a ABank@ and
collectively the "Banks"), Bank of America, N.A., as
Syndication Agent, Citibank, N.A., as Documentation
Agent, Chase Securities Inc., as Lead Arranger and as
Book Manager, and The Chase Manhattan Bank, as
Administrative Agent, do hereby agree as follows:
ARTICLE 1
Definitions and Accounting Terms
Section 1.01. Defined Terms. As used in this
Agreement, and unless the context otherwise requires,
the following terms shall have the meanings set out
respectively after each:
"Adjusted CD Rate" - With respect to any Interest
Period for a CD Rated Loan, the sum of (a) the quotient
(rounded upwards, if necessary, to the next higher
1/100 of 1%) obtained by dividing the CD Rate by 1.00
minus the Reserve Percentage and (b) the Assessment
Rate. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any
change in the Reserve Percentage.
"Administrative Agent" - The Chase Manhattan Bank
or its successor appointed pursuant to Section 7.11, in
its capacity as administrative agent in respect of this
Agreement.
"Agents" - The Administrative Agent, the
Syndication Agent and the Documentation Agent.
"Agreement" - This 364-Day Credit Agreement, as
the same may be amended, modified, supplemented or
restated from time to time in accordance with the terms
hereof.
"Assessment Rate" - With respect to any Interest
Period for a CD Rated Loan, the net annual assessment
rate actually paid by Chase to the Federal Deposit
Insurance Corporation (or any successor) for insurance
by such corporation (or such successor) of time
deposits made in dollars at offices of Chase in the
United States during the most recent period for which
such rate has been determined prior to the commencement
of such Interest Period.
"Attributable Debt" - Any particular sale and
leaseback transaction under which the Company or any
subsidiary is at the time liable, at any date as of
which the amount thereof is to be determined (a) in the
case of any such transaction involving a capital lease,
the amount on such date capitalized thereunder, or (b)
in the case of any other sale and leaseback
transaction, the then present value of the minimum
rental obligations under such sale and leaseback
transaction during the remaining term thereof (after
giving effect to any extensions at the option of the
lessor) computed by discounting the respective rental
payments at the actual interest factor included in such
payments or, if such interest factor cannot be readily
determined, at the rate of 10% per annum. The amount of
any rental payment required to be made under any such
sale and leaseback transaction not involving a capital
lease may exclude amounts required to be paid by the
lessee on account of maintenance and repairs,
insurance, taxes, assessments, utilities, operating and
labor costs and similar charges.
"Bank of America" - Bank of America, N.A.
"Book Manager" - Chase Securities Inc.
"Borrowing Date' - Each Working Day or Business
Day, as the case may be, specified in a notice pursuant
to Section 2.03 as a date on which the Company requests
(or is deemed to have requested) the Banks to make
Loans.
"Business Day" - A day which in the City of New
York is not a day on which banks are generally
authorized or obligated by law to close.
"CD Margin" - A rate per annum determined in
accordance with the Pricing Schedule.
"CD Rate" - With respect to any Interest Period
for a CD Rated Loan, the average rate per annum bid at
10:00 A.M. (New York City time), or as soon thereafter
as practicable, on the first day of such Interest
Period by New York certificate of deposit dealers of
recognized standing for the purchase at face value from
the Reference Banks of their certificates of deposit in
an amount comparable to the portion of the CD Rated
Loans of Chase to which such Interest Period applies
and having a maturity comparable to such Interest
Period.
"CD Rated Loans" - Loans hereunder at such time as
they bear interest at a rate based upon the Adjusted CD
Rate.
"Change in Control" - (a) The acquisition by any
Person or two or more Persons acting in concert of
beneficial ownership (within the meaning of Rule 13d-3
of the Commission) of 50% or more of the outstanding
shares of voting stock of the Company unless the Board
of Directors of the Company shall have publicly
announced its support for such acquisition or (b) a
majority of the members of the Board of Directors of
the Company on any date shall not have been (i) members
of the Board of Directors of the Company on the date 12
months prior to such date or (ii) approved by Persons
who constitute at least a majority of the members of
the Board of Directors of the Company as constituted on
the date 12 months prior to such date.
"Chase" - The Chase Manhattan Bank.
"Citibank" - Citibank, N.A.
"Commission" - The Securities and Exchange
Commission, as from time to time constituted, created
under the Securities Exchange Act of 1934, or, if at
any time after the execution of this Agreement such
Commission is not existing and performing the duties
now assigned to it, then the body performing such
duties at such time.
"Commitment" - As to each Bank, its obligation to
make Loans to the Company pursuant to Section 2.01 in
the amount set forth opposite its name below, as such
obligation may be increased pursuant to Section 2.22 or
pursuant to any assignment permitted under Section 8.05
or reduced pursuant to this Agreement or any such
assignment:
Bank Amount of Percentage of
Commitment Commitment
The Chase Manhattan Bank $35,000,000.00 11.666666667%
Bank of America, N.A. $35,000,000.00 11.666666667%
Citibank, N.A. $35,000,000.00 11.666666667%
Bank One, N.A. $29,000,000.00 9.666666667%
Royal Bank of Canada $29,000,000.00 9.666666667%
Bank of Tokyo- $29,000,000.00 9.666666667%
Mitsubishi, Ltd.
Credit Suisse First $29,000,000.00 9.666666667%
Boston
West Deutsche Landesbank $29,000,000.00 9.666666667%
Mellon Bank, N.A. $25,000,000.00 8.333333333%
Wachovia Bank, N.A. $25,000,000.00 8.333333333%
Total $300,000,000.00 100.000000000%
"Commitment Increase Agreement" - Any agreement
among the Company, the Administrative Agent and a Bank
in substantially the form attached hereto as Exhibit D.
"Commitment Fee Rate" - A rate per annum
determined in accordance with the Pricing Schedule.
"Consolidated Indebtedness" - At any time, the
Indebtedness of the Company and its subsidiaries,
determined on a consolidated basis as of such time in
accordance with generally accepted accounting
principles, as such principles are in effect on the
date of this Agreement, excluding any such Indebtedness
of the Company or its subsidiaries that is non-recourse
to the Company.
"Consolidated Stockholders' Equity" - The par or
stated value of the stock of the Company plus paid-in
capital plus retained earnings, all as shown on the
consolidated balance sheet of the Company and its
subsidiaries prepared in accordance with generally
accepted accounting principles, as such principles are
in effect on the date of this Agreement.
"Credit Agreement" - The 364-Day Credit Agreement,
dated as of April 15, 1999, among the Company, the
banks named therein, Bank of America, N.A. (formerly
Bank of America National Trust and Savings
Association), as syndication agent, Citibank, N.A., as
documentation agent, Chase Securities Inc., as lead
arranger and book manager, and Chase, as administrative
agent, as the same has been amended, modified,
supplemented or restated prior to the date hereof.
"Defaulting Bank" - Any Bank that shall (i) fail
to make any Loan required to be made by it hereunder,
(ii) state in writing that it will not make, or that it
has disaffirmed or repudiated its obligation to make,
any Loan required to be made by it hereunder, by reason
of the provisions of the Financial Institution Reform,
Recovery and Enforcement Act of 1989 or otherwise or
(iii) assign or transfer all or a part of its rights
hereunder without the prior written consent of the
Company.
"Documentation Agent" - Citibank, in its capacity
as documentation agent in respect of this Agreement.
"Domestic Lending Office" - Initially, the office
of a Bank designated as such and set forth with its
signature below, and thereafter such other office of
such Bank, if any, of which such Bank shall notify the
Administrative Agent and Company in writing.
"Domestic Loans" - All Reference Rated Loans and
CD Rated Loans.
"Effective Date" - The date on which the
conditions precedent set forth in Section 5.01 shall
have been met, which date shall not be later than April
14, 2000, or such other date as the parties hereafter
shall agree upon.
"AEurodollar Lending Office" - Initially, the
office of a Bank designated as such and set forth with
its signature below, and thereafter such other office
of such Bank, if any, of which such Bank shall notify
the Administrative Agent and the Company in writing.
"Eurodollar Loans" - Loans hereunder at such time
as they bear interest at a rate based upon the
Eurodollar Rate.
"Eurodollar Margin" - A rate per annum determined
in accordance with the Pricing Schedule.
"Eurodollar Rate" - With respect to any Interest
Period pertaining to a Eurodollar Loan, the quotient
obtained by dividing (a) the applicable Interbank Rate
by (b) 1.00 minus that percentage (expressed as a
decimal) which is prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for
determining the reserve requirement for a member bank
of the Federal Reserve System in New York City with
deposits exceeding $1,000,000,000 in respect of
Eurocurrency liabilities having a maturity comparable
to such Interest Period and in an amount comparable to
that portion of the Eurodollar Loans of Chase to which
such Interest Period applies (such Eurodollar Rate to
be adjusted to the next higher 1/100 of 1%). The
percentage referred to in clause (b) of the immediately
preceding sentence shall be adjusted automatically on
and as of the effective date of any change in the
reserve requirement referred to in such clause (b).
"Event of Default" - Any of the events of default
set forth in Article 6.
"Extension Agreement" - Any of the extension
agreements in substantially the form attached hereto as
Exhibit B.
"Indebtedness" - Any indebtedness which: is for
money borrowed; represents the deferred purchase price
of property or assets purchased, except trade accounts
payable in the ordinary course of business; is in
respect of a capitalized lease, an advance payment or
production payment (other than in respect of advance
payments or production payments received in the
ordinary course of business for hydrocarbons which must
be delivered within 18 months after the date of such
payment); or is in respect of a guarantee of any of the
foregoing obligations of another Person.
"Interbank Rate" - The average offered rate quoted
to the Reference Banks in the London Interbank
Eurodollar Market as of 10:00 A.M. (New York City time)
two Working Days immediately preceding the commencement
of the Interest Period for a Eurodollar Loan for
deposits in United States dollars in an amount
comparable to the Eurodollar Loan of Chase to which
such Interest Period applies and for a period of time
comparable to such Interest Period.
"Interest Payment Date" - (a) As to any Reference
Rated Loan, the end of any quarter with respect thereto
and the Maturity Date, (b) as to any Eurodollar Loan,
the last day of the Interest Period with respect
thereto, and, for Interest Periods longer than 3
months, each date which is 3 months, or a whole
multiple thereof, from the first day of such Interest
Period and (c) as to any CD Rated Loan, the last day of
the Interest Period with respect thereto, and, for
Interest Periods of 180 days, the date which is 90 days
from the first day of such Interest Period.
"Interest Period" - (a) With respect to any
Eurodollar Loan:
(i) initially, the period commencing on the
Borrowing Date or conversion date, as the case may be,
with respect to such Eurodollar Loan and ending 1, 2,
3, 6 or, to the extent funds are available, as
determined by the Administrative Agent, 9 months
thereafter, as selected by the Company in its notice of
borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(ii) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to
such Eurodollar Loan and ending 1, 2, 3, 6 or, to the
extent funds are available, as determined by the
Administrative Agent, 9 months thereafter, as selected
by the Company by irrevocable notice to the
Administrative Agent not less than two Working Days
prior to the last day of the then current Interest
Period with respect thereto; and
(b) with respect to any CD Rated Loan:
(i) initially, the period commencing on the
Borrowing Date or conversion date, as the case may
be, with respect to such CD Rated Loan and ending
30, 60, 90 or 180 days thereafter, as selected by
the Company in its notice of borrowing or notice
of conversion, as the case may be, given with
respect thereto; and
(ii) thereafter, each period commencing on the
last day of the next preceding Interest Period
applicable to such CD Rated Loan and ending 30,
60, 90 or 180 days thereafter, as selected by the
Company by irrevocable notice to the
Administrative Agent on the last day of the then
current Interest Period with respect thereto;
provided that, the foregoing provisions relating to
Interest Periods are subject to the following:
(A) the Company shall have no right to elect an
Interest Period which would extend beyond the Maturity
Date;
(B) if any Interest Period pertaining to a
Eurodollar Loan would otherwise end on a day which is
not a Working Day, that Interest Period shall be
extended to the next succeeding Working Day unless the
result of such extension would be to carry such
Interest Period into another calendar month in which
event such Interest Period shall end on the immediately
preceding Working Day;
(C) if any Interest Period pertaining to a CD Rated
Loan would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to
the next succeeding Business Day;
(D) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Working Day of a calendar
month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Working Day
of a calendar month;
(E) if any Interest Period would otherwise extend
beyond the (i) Maturity Date or (ii) date an amount or
amounts are required to be repaid pursuant to Section
2.07, then (1) the Interest Period for the principal
amount (if any) of each Loan required to be repaid on
such date shall end on such date and (2) the remainder
(if any) of each such Loan shall have an Interest
Period determined as set forth above; and
(F) for purposes of determining the availability of
9 month Interest Periods in respect of Eurodollar
Loans, such Interest Periods shall be deemed available
if (1) each of the Reference Banks quotes a rate to the
Administrative Agent as provided in the definition of
Eurodollar Rate and (2) the Majority Banks shall not
have advised the Administrative Agent that the
Eurodollar Rate determined by the Administrative Agent
on the basis of such quotes will not adequately and
fairly reflect the cost to such Banks of maintaining or
funding their Eurodollar Loans for such Interest
Period.
"Lead Arranger"- Chase Securities Inc.
"Lien" - Any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind, including,
without limitation, any conditional sale or other title
retention agreement, any lease in the nature thereof
and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any
jurisdiction and, in the case of any production
payment, the right, title and interest of the owner of
such production payment in the Mineral Interests out of
the production from which such production payment is
payable.
"Loan" - As the context may require, any CD Rated
Loan, Eurodollar Loan or Reference Rated Loan.
"Majority Banks" - At any time, Banks holding at
least 66 2/3% of the then aggregate unpaid principal
amount of the Notes held by Banks or, if no such
principal amount is then outstanding, Banks having at
least 66 2/3% of the Commitments.
"Maturity Date" means the first anniversary of the
Termination Date or, if such day is not a Working Day,
the next succeeding Working Day unless such Working Day
falls in another calendar month, in which case the
Maturity Date shall be the next preceding Working Day.
"Moodys" - Moody's Investors Service, Inc.
"New Bank" - Has the meaning ascribed thereto in
Section 2.22.
"New Bank Agreement" - Any agreement among the
Company, the Administrative Agent and a New Bank in
substantially the form attached hereto as Exhibit C.
"Note" - Any of the promissory notes of the
Company payable to the order of any Bank in
substantially the form attached hereto as Exhibit A.
"Person" - Any individual, corporation,
partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or
government or any agency or political subdivision
thereof.
"Pricing Schedule" - The Schedule attached hereto
and identified as such.
"Public Indenture" - The Indenture, dated as of
May 10, 1988, between the Company and Continental
Illinois National Bank and Trust Company of Chicago
(now known as Continental Bank N.A.), as Trustee, as
amended by the First Supplemental Indenture, dated as
of November 15, 1991, between the Company and
Continental Bank N.A.
"Reference Banks" - Chase, Bank of America and
Citibank.
"Reference Rate" - The rate of interest publicly
announced by Chase from time to time in the City of New
York as its reference rate. The reference rate is not
intended to be the lowest rate of interest charged by
Chase in connection with extensions of credit to
debtors.
"Reference Rated Loans" - Loans hereunder at such
time as they bear interest at a rate based upon the
Reference Rate.
"Reserve Percentage" - For any day during any
Interest Period pertaining to a CD Rated Loan, that
percentage (expressed as a decimal) which is in effect
on such day, as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for
determining the reserve requirement for a member bank
of the Federal Reserve System in the City of New York
with deposits exceeding $1,000,000,000 in respect of
new non-personal time deposits in dollars in the City
of New York having a maturity comparable to the portion
of the CD Rated Loans to which such Interest Period
applies and in an amount of $100,000 or more.
"S&P" - Standard & Poor's Ratings Service.
"Syndication Agent" - Bank of America, in its
capacity as syndication agent in respect of this
Agreement.
"Termination Date" - April 13, 2001 or such later
date to which the Termination Date shall have been
extended pursuant to Section 2.05(c), or, if such day
is not a Working Day, the next preceding Working Day.
"Tranche" - The collective reference to Loans
(other than Reference Rated Loans) of the same Type the
then current Interest Periods with respect to all of
which begin on the same date and end on the same later
date (whether or not such Loans shall originally have
been made on the same day).
"Type" - As to any Loan, its nature as a Reference
Rated Loan, a CD Rated Loan or a Eurodollar Loan.
"Working Day" - A day on which banks are open for
business in the City of New York and in London and
dealings are carried out in the London Interbank
Eurodollar Market.
Section 1.02. Use of Defined Terms. Any defined
term used in the plural preceded by the definite
article shall be taken to encompass all members of the
relevant class. Any defined term used in the singular
preceded by Aany@ shall be taken to indicate any number
of the members of the relevant class.
Section 1.03. Accounting Terms. All accounting
terms not specifically defined herein shall be
construed in each case in accordance with generally
accepted accounting principles as in effect on the date
of this Agreement.
ARTICLE 2
Amount and Terms of Loans
Section 2.01. Loans. (a) Subject to the terms
and conditions of this Agreement, each Bank severally
agrees to make revolving credit Loans to the Company
from time to time during the period from the Effective
Date to, and including, the Termination Date in an
aggregate principal amount at any one time outstanding
not to exceed its Commitment. The Company may use the
Commitments by repaying and prepaying the Loans in
whole or in part, and on or prior to the Termination
Date, borrowing and reborrowing, all in accordance with
the terms and conditions hereof.
(b) The Loans may be (i) Eurodollar Loans, (ii)
Reference Rated Loans, (iii) CD Rated Loans or (iv) a
combination thereof, as determined by the Company and
notified to the Administrative Agent in accordance with
Sections 2.03 and 2.21. Eurodollar Loans shall be made
and maintained by each Bank at either a Eurodollar
Lending Office or a Domestic Lending Office, at its
option.
Section 2.02. Notes. (a) Loans made by each Bank
pursuant hereto shall be evidenced by an appropriate
Note, payable to the order of such Bank and
representing the obligation of the Company to pay the
amount of the Commitment of such Bank or, if less, the
aggregate unpaid principal amount of all Loans made by
such Bank, with interest thereon as prescribed in
Section 2.09. Each Note shall (i) be dated the
Effective Date, (ii) mature on the Maturity Date and
(iii) bear interest for the period from the date
thereof until paid in full on the unpaid principal
amount thereof from time to time outstanding at the
applicable interest rate per annum determined as
provided in Section 2.09 and payable as specified in
Section 2.09(e). Each Bank is hereby authorized to
record the date, Type and amount of each Loan made by
such Bank pursuant to Section 2.01, each continuation
thereof, each conversion of all or a portion thereof to
another Type, and the date and amount of each repayment
or prepayment of principal thereof, on the schedule
annexed to and constituting a part of its Note, and any
such recordation shall constitute prima facie evidence
of the accuracy of the information so recorded.
(b) Each Bank shall, at the request of the Company,
deliver to the Company copies of the Notes and the
schedules annexed thereto.
Section 2.03. Procedure for Borrowing. The
Company may borrow on any Working Day if the borrowing
(or any portion thereof) consists of Eurodollar Loans
or on any Business Day if the borrowing consists
entirely of Domestic Loans; provided that the Company
shall give the Administrative Agent notice not later
than (i) two Working Days prior to the Borrowing Date,
in the case of Eurodollar Loans, and (ii) the Borrowing
Date, in the case of Domestic Loans. Such notice shall
specify (i) the amount to be borrowed, (ii) the
Borrowing Date, (iii) whether the borrowing is to
consist of Eurodollar Loans, Reference Rated Loans, CD
Rated Loans or a combination thereof (in each case
stating the amounts requested), and (iv) except in the
case of Reference Rated Loans, the length of the
Interest Period(s) therefor. Each borrowing shall be in
an aggregate principal amount not less than (i) in the
case of Reference Rated Loans, the lesser of (A)
$10,000,000 or a whole multiple of $5,000,000 in excess
thereof and (B) the then unused Commitments or (ii) in
the case of CD Rated Loans or Eurodollar Loans,
$10,000,000 or a whole multiple of $5,000,000 in excess
thereof. Upon receipt of such notice, the
Administrative Agent shall promptly notify each Bank
thereof. Each Bank will make the amount of its pro rata
share of each borrowing available to the Administrative
Agent for the account of the Company at the office of
the Administrative Agent designated by the
Administrative Agent in the Administrative Agent=s
notice aforesaid prior to 11:30 A.M. (according to the
time of the place where such office of the
Administrative Agent is located) on the Borrowing Date
requested by the Company in funds immediately available
to the Administrative Agent as the Administrative Agent
may direct. The proceeds of each such borrowing will
then be made available to the Company by the
Administrative Agent crediting the account of the
Company on the books of the Administrative Agent with
the aggregate amount made available to the
Administrative Agent by the Banks and in like funds as
received by the Administrative Agent.
Section 2.04. Fees. (a) Subject to subsection
(c) of this Section, the Company agrees to pay to the
Administrative Agent for the account of each Bank a
commitment fee from the Effective Date to, but not
including, the Termination Date or such earlier date
upon which the Commitments shall terminate or be
reduced to zero pursuant to Section 2.05 or 6.01,
computed at the Commitment Fee Rate (determined daily
in accordance with the Pricing Schedule) on the daily
unused portion of the Commitments.
(b) Subject to subsection (c) of this Section, the
Company agrees to pay to the Administrative Agent for
the account of each Bank, for any day on which the
aggregate principal amount of Loans outstanding exceeds
25% of the aggregate Commitments, a utilization fee,
calculated at a per annum rate of 0.25%, on the
aggregate principal amount of the Loans of such Bank
outstanding on such day.
(c) If any Bank shall become a Defaulting Bank,
then, notwithstanding subsection (a) or (b) above and
without prejudicing any right or remedy that the
Company may have with respect to, on account of,
arising from or relating to any event pursuant to which
such Bank shall be a Defaulting Bank, no commitment fee
shall accrue for the account of such Bank from and
after the date upon which such Bank shall have become a
Defaulting Bank.
(d) Commitment and utilization fees shall be
payable quarterly in arrears on the last day of each
March, June, September and December, commencing on June
30, 2000, and on the Termination Date or such earlier
date as the Commitments shall terminate or be reduced
to zero as provided herein.
Section 2.05. Reduction, Termination or Extension
of Commitments. (a) The Company shall have the right,
upon not less than two Business Days= notice to the
Administrative Agent, to terminate the Commitments or,
from time to time, reduce the amount of the
Commitments. Any reduction shall be accompanied by
prepayment of the Loans to the extent, if any, that the
Loans then outstanding exceed the amount of the
Commitments as then reduced. Any termination of the
Commitments shall be accompanied by prepayment in full
of the Loans then outstanding and the payment of any
unpaid commitment fees then accrued hereunder. Upon
receipt of such notice, the Administrative Agent shall
promptly notify each Bank thereof. Any reduction shall
be in an amount of $5,000,000 or a whole multiple
thereof and shall reduce permanently the amount of the
Commitments then in effect. The Commitments once
terminated or reduced may not be reinstated.
(b) [Intentionally omitted].
(c) The Commitments may be extended in the manner
set forth in this subsection (c), in each case for a
period of 364 days from the date on which Banks having
100% of the Commitments (after giving effect to any
assignments or terminations referred to in the fourth
sentence of this subsection (c)) shall have executed an
Extension Agreement as provided herein (the AExtension
Date@). If the Company wishes to request an extension
of the Commitments, it shall give notice to that effect
to the Administrative Agent not less than 30 nor more
than 60 days prior to the Termination Date then in
effect, whereupon the Administrative Agent shall
promptly notify each of the Banks of such request. Each
Bank will use its best efforts to respond to such
request, whether affirmatively or negatively, as it may
elect in its sole discretion, within 20 days of such
notice to the Administrative Agent. If less than all
Banks respond affirmatively to such request within 20
days, then the Company may (i) require the Banks that
do not elect to extend their Commitments to assign
their Commitments in their entirety to one or more
assignees, mutually satisfactory to the Company and to
the Administrative Agent, no later than 15 days prior
to the Termination Date then in effect, which assignees
will agree to extend such Commitment and (ii) if Banks
holding at least 80% of the Commitments then
outstanding (including assignees that shall have become
Banks pursuant to clause (i) above) shall have agreed
to extend their respective Commitments, the Company
may, with effect from the Extension Date, terminate the
Commitments of the Banks that shall not have agreed to
so extend and prepay all Loans and other amounts then
owing to any such Banks, in each case in accordance
with Section 8.06(a) hereof. If all Banks (including
such assignees, excluding their respective transferor
Banks, and excluding all such Banks whose Commitments
have been so terminated) respond affirmatively, then,
subject to receipt by the Administrative Agent of
counterparts of an Extension Agreement in substantially
the form of Exhibit B hereto duly completed and signed
by all of the parties thereto, the Commitments shall be
extended for the period specified above. Such Extension
Agreement shall be executed and delivered no earlier
than 5 days prior to the Termination Date then in
effect, and no extension of the Commitments pursuant to
this subsection (c) shall be legally binding on any
party hereto unless and until such Extension Agreement
is so executed and delivered and accepted by the
Company.
(d) All outstanding Commitments shall terminate on
the Termination Date.
Section 2.06. Optional Prepayments. (a) The
Company may, at its option, as provided in this Section
2.06, at any time and from time to time prepay the
Loans, in whole or in part, upon at least two Business
Days= prior notice to the Administrative Agent,
specifying (i) the date and amount of prepayment and
(ii) the respective amounts to be prepaid in respect of
Reference Rated Loans, CD Rated Loans and Eurodollar
Loans. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Bank thereof. The
payment amount specified in such notice shall be due
and payable on the date specified. All prepayments
pursuant to this Article 2 shall include accrued
interest on the amount prepaid to the date of
prepayment and, in the case of prepayments of
Eurodollar Loans and CD Rated Loans, any amounts
payable pursuant to Section 2.19. The Loans shall also
be subject to prepayment as provided in Sections 2.05,
2.07, 2.12, 2.13 and 8.06.
(b) Partial optional prepayments pursuant to this
Section 2.06 shall be in an aggregate principal amount
of $10,000,000 or any whole multiple of $5,000,000 in
excess thereof. All prepayments of Loans pursuant to
this Article 2 shall be without the payment by the
Company of any premium or penalty except for amounts
payable pursuant to Section 2.19.
Section 2.07. Mandatory Prepayments. If at any
time prior to the Termination Date the aggregate
outstanding principal amount of the Loans exceeds the
Commitments, the Company shall prepay the Loans in an
amount equal to such excess. Each prepayment of Loans
pursuant to this Section 2.07 shall be accompanied by
payment of accrued interest on the amount prepaid to
the date of prepayment and, in the case of prepayments
of Eurodollar Loans and CD Rated Loans, any amounts
payable pursuant to Section 2.19.
Section 2.08. Repayment of Loans. The Company
shall pay to the Administrative Agent for the account
of each Bank the unpaid principal amount of each Loan
made by such Bank on the Maturity Date.
Section 2.09. Interest Rate. (a) Each Eurodollar
Loan shall bear interest for each day during each
Interest Period with respect thereto on the unpaid
principal amount thereof at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the
Eurodollar Margin for such day.
(b) Each Reference Rated Loan shall bear interest
on the unpaid principal amount thereof at a fluctuating
rate per annum equal to the Reference Rate.
(c) Each CD Rated Loan shall bear interest for each
day during each Interest Period with respect thereto on
the unpaid principal amount thereof at a rate per annum
equal to the Adjusted CD Rate for such Interest Period
plus the CD Margin for such day.
(d) Any overdue principal of any Loan shall,
without limiting the rights of any Bank under Article
6, bear interest at a rate per annum which is 1% above
the rate which would otherwise be applicable to such
Loan pursuant to subsections (a), (b) and (c) of this
Section 2.09 until paid in full (as well after as
before judgment).
(e) Interest shall be payable on each Interest
Payment Date.
Section 2.10. Computation of Interest and Fees.
(a) Interest on the Reference Rated Loans and
commitment fees shall be calculated on the basis of a
365- (or 366- as the case may be) day year for the
actual days elapsed. Interest on Eurodollar Loans and
CD Rated Loans shall be calculated on the basis of a
360-day year for the actual days elapsed. The
Administrative Agent shall notify the Company and the
Banks of each determination of a Eurodollar Rate and of
an Adjusted CD Rate. Any change in the interest rate
resulting from a change in the Reference Rate shall
become effective as of the opening of business on the
day on which such change in the Reference Rate shall
become effective. The Administrative Agent shall notify
the Company and the Banks of the effective date and the
amount of each such change in the Reference Rate.
(b) The Administrative Agent shall, at the request
of the Company, deliver to the Company a statement
showing the quotations given by the Reference Banks and
the computations used by the Administrative Agent in
determining any interest rate pursuant to subsection
(a) or (c) of this Section 2.10.
(c) If any of the Reference Banks shall be unable
or shall otherwise fail to notify the Administrative
Agent of a rate, the interest rate shall be determined
on the basis of the rate notified by the other
Reference Bank or Reference Banks.
Section 2.11. Pro Rata Treatment and Payments.
Each borrowing by the Company from the Banks, each
payment (including each prepayment) by the Company on
account of the principal of and interest on the Loans
and on account of any commitment fees hereunder and any
reduction of the Commitments of the Banks hereunder
shall be made pro rata according to the Commitments,
except that (i) payments or prepayments, and offsets
against or reductions from the amount of payments and
prepayments, in each case, specifically for the account
of a particular Bank under the terms of Section 2.04,
2.05, 2.12, 2.13, 2.19 or 8.06 shall be made for the
account of such Bank and (ii) if any Bank shall become
a Defaulting Bank, from and after the date upon which
such Bank shall have become a Defaulting Bank, any
payment made on account of principal of or interest on
the Loans shall be applied, first for the account of
the Banks other than the Defaulting Bank, pro rata
according to the Commitments of such Banks, until the
principal of and interest on the Loans of such Banks
shall have been paid in full and, second for the
account of such Defaulting Bank, provided that the
application of such payments in accordance with this
clause (ii) shall not constitute an Event of Default or
an event which with the giving of notice or the passage
of time, or both, would constitute an Event of Default,
and no payment of principal of or interest on the Loans
of such Defaulting Bank shall be considered to be
overdue for purposes of Section 2.09(d) hereof, if, had
such payments been applied without regard to this
clause (ii), no such Event of Default or event which
with the giving of notice or the passage of time, or
both, would constitute an Event of Default would have
occurred and no such payment of principal of or
interest on the Loans of such Defaulting Bank would
have been overdue. All payments (including prepayments)
to be made by the Company on account of principal,
interest and commitment fees shall be made without
setoff or counterclaim and shall be made to the
Administrative Agent on behalf of the Banks at the
Administrative Agent=s office located at (a) 270 Park
Avenue, New York, New York 10017 at or before 12:00
noon (New York City time) in the case of Domestic Loans
and commitment fees, for the account of the Domestic
Lending Offices of the Banks and (b) 4 New York Plaza,
New York, New York 10015 at or before 12:00 noon (New
York City time) in the case of Eurodollar Loans, for
the account of the Eurodollar Lending Offices or
Domestic Lending Offices, as the case may be, of the
Banks which shall then be maintaining Eurodollar Loans,
in each case in lawful money of the United States of
America and in immediately available funds. The
Administrative Agent shall distribute such payments to
the Banks promptly upon receipt in like funds as
received.
If any payment hereunder (other than payments on
the Eurodollar Loans) becomes due and payable on a day
other than a Business Day, such payment shall be
extended to the next succeeding Business Day, and with
respect to payments of principal, interest thereon
shall be payable at the then applicable rate during
such extension. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Working
Day, the maturity thereof shall be extended to the next
succeeding Working Day unless the result of such
extension would be to extend such payment into another
calendar month in which event such payment shall be
made on the immediately preceding Working Day. Each
Bank is authorized to and shall endorse the date, Type
and amount of each Loan made by such Bank, each
continuation thereof, each conversion of all or a
portion thereof to another Type, and the date and
amount of each payment of principal with respect
thereto on the schedule annexed to and constituting a
part of its Note. No failure to make or error in making
any such endorsement as authorized hereby shall affect
the validity of the obligations of the Company to repay
the unpaid principal amount of the Loans with interest
thereon as provided in Section 2.09 or the validity of
any payment thereof made by the Company.
Except as provided in Sections 2.04(c), 2.05,
2.12, 2.13, 2.19, 8.06 and this Section 2.11, if the
holder of any Note shall obtain any payment (whether
voluntary, involuntary, by application of offset or
otherwise) upon principal of or interest on such Note
in excess of its pro rata share of payments obtained by
all holders upon principal of and interest on such
Notes then held by them, such holder shall purchase
from the other holders such participation in such Notes
held by them as shall be necessary to cause such
purchasing holder to share the excess payment ratably
with each of them; providing however, that if all or
any portion of the excess payment is thereafter
recovered from such purchasing holder, the purchase
shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
The following subsection (a) of Section 2.12 and
subsection (b) of Section 2.15 shall be applicable to
Eurodollar Loans and CD Rated Loans only and the
following Section 2.13 and subsection (a) of Section
2.15 shall be applicable to Eurodollar Loans only.
Section 2.12. Increased Cost of Loans. (a) In
the event of any change in any applicable law, treaty
or governmental regulation after the date of this
Agreement, or in the interpretation or application
thereof after the date of this Agreement, or compliance
by any Bank with any request or directive (whether or
not having the force of law) from any central bank or
other governmental authority made or issued after the
date of this Agreement, which:
(iii) does or shall subject such Bank to any tax
of any kind whatsoever (including, without
limitation, withholding taxes) with respect to
this Agreement, any Note or any Eurodollar or CD
Rated Loan, or change the basis of taxation of
payments to such Bank of principal, commitment
fees, penalty fees, interest or any other amount
payable hereunder (except for changes in the rate
of tax on the overall net income of such Bank);
(iv) does or shall impose, modify or hold
applicable any reserve, special deposit,
compulsory loan or similar requirement against
assets held by, or deposits or other liabilities
in or for the account of, advances or loans by, or
other credit extended by, or any other acquisition
of funds by, any office of such Bank (in excess,
and without duplication, of those taken into
account in computing the Eurodollar Rate for any
Eurodollar Interest Period, the Reserve Percentage
and the Assessment Rate); or
(v) does or shall impose on such Bank any
other condition;
and the result of any of the foregoing is to increase
the cost to such Bank of making, converting into,
continuing or maintaining Eurodollar Loans or CD Rated
Loans or to reduce any amount receivable hereunder with
respect to Eurodollar Loans or CD Rated Loans, then, in
any such case, the Company shall pay such Bank, upon
written demand being made to the Company by such Bank,
such additional amount which will compensate such Bank
for such amounts as that Bank reasonably deems to be
material with respect to this Agreement, the Notes or
the Loans hereunder, provided, however, that if all or
any such additional cost would not have been payable,
or such reduction would not have occurred, but for such
Bank=s decision to designate a new Eurodollar Lending
Office or refusal to change to another Eurodollar
Lending Office as provided below, the Company shall
have no obligation under this Section 2.12 to
compensate such Bank for such amount. Such demand shall
be accompanied by a certificate of a duly authorized
officer of such Bank setting forth the amount of such
payment and the basis therefor, which certificate shall
be prima facie evidence of the amount of such payment.
Each Bank shall also give written notice to the Company
and the Administrative Agent of any event occurring
after the date of this Agreement which would entitle
such Bank to compensation pursuant to this Section 2.12
as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation and
will designate a different Eurodollar Lending Office if
such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole
opinion of such Bank, be disadvantageous to such Bank.
Notwithstanding the foregoing, in the event that any
Bank shall demand payment pursuant to this Section
2.12, the Company may, upon at least two Business Days=
notice to the Administrative Agent and such Bank,
convert in whole (but not in part) the Eurodollar Loans
or CD Rated Loans, as the case may be, of such Bank,
into Loans of another Type without regard to the
requirements of Section 2.21 (other than clause (i) of
the proviso to the last sentence of subsection (a)
thereof).
(b) In the event that any Bank shall have
reasonably determined that the adoption after the date
of this Agreement of any law, rule or regulation
regarding capital adequacy, or any change therein or in
the interpretation or application thereof after the
date of this Agreement or compliance by any Bank with
any request or directive regarding capital adequacy
(whether or not having the force of law) from any
central bank or governmental authority made or issued
after the date of this Agreement, does or shall have
the effect of reducing the rate of return on such
Bank=s capital as a consequence of its obligations
hereunder to a level below that which such Bank could
have achieved but for such adoption, change or
compliance (taking into consideration such Bank=s
policies with respect to capital adequacy) by an amount
reasonably deemed by such Bank to be material, then
from time to time, after submission by such Bank to the
Company (with a copy to the Administrative Agent) of a
written request therefor, the Company shall pay to such
Bank such additional amount or amounts as will
compensate such Bank for such reduction from and after
such date the Company receives the request; provided,
however, that the foregoing shall not apply to any
capital adequacy requirement imposed solely by reason
of any business combination effected after the date
hereof.
Section 2.13. Illegality. Notwithstanding
anything herein contained, if any Bank shall make a
good faith determination that a change in any
applicable law or regulation or in the interpretation
thereof by any authority charged with the
administration thereof shall make it unlawful for such
Bank to give effect to its obligations to make, convert
into, continue or maintain its Eurodollar Loans under
this Agreement, the obligation of such Bank to make,
convert into, continue or maintain Eurodollar Loans
hereunder shall be suspended for the duration of such
illegality. Such Bank, by written notice to the
Administrative Agent and to the Company, shall declare
that such Bank=s obligation to make, convert into,
continue and maintain Eurodollar Loans shall be
suspended, and the Company, on the last day of the then
current Interest Period applicable to such Eurodollar
Loans or portion thereof or, if the Bank so requests,
on such earlier date as may be required by relevant
law, shall convert such Eurodollar Loans or portion
thereof into Loans of another Type, without regard to
the requirements of Section 2.21 (other than clause (i)
of the proviso to the last sentence of subsection (a)
thereof). If and when such illegality ceases to exist,
such suspension shall cease and such Bank shall notify
the Company and the Administrative Agent thereof and
any Loans previously converted from Eurodollar Loans to
Loans of a different Type pursuant to this Section 2.13
shall be converted into Loans of Types corresponding to
the Loans maintained by the other Banks on the last day
of the Interest Period of the corresponding Eurodollar
Loans of the other Banks unless, in the case of a
conversion of CD Rated Loans, the Company shall have
elected, by notice to the Administrative Agent, not to
convert such CD Rated Loans until the last day of the
then current Interest Period with respect thereto, in
which case, such CD Rated Loans shall be converted at
such time as the Company may elect in accordance with
Section 2.21.
Section 2.14. Withholding Tax Exemption. At
least five Business Days prior to the first date on
which interest or fees are payable hereunder for the
account of any Bank, each Bank that is not incorporated
under the laws of the United States of America or a
state thereof agrees that it will deliver to each of
the Company and the Administrative Agent two duly
completed copies of United States Internal Revenue
Service Form W-8ECI or W-8BEN, certifying in either
case that such Bank is entitled to receive payments
under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes.
Each Bank which so delivers a Form W-8ECI or W-8BEN
further undertakes to deliver to each of the Company
and the Administrative Agent two additional copies of
such form (or a successor form) on or before the date
that such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most
recent form so delivered by it, and such amendments
thereto or extensions or renewals thereof as may be
reasonably requested by the Company or the
Administrative Agent, in each case certifying that such
Bank is entitled to receive payments under this
Agreement and the Notes without deduction or
withholding of any United States federal income taxes,
unless an event (including without limitation any
change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable
or which would prevent such Bank from duly completing
and delivering any such form with respect to it and
such Bank advises the Company and the Administrative
Agent that it is not capable of receiving payments
without any deduction or withholding of United States
federal income tax.
Section 2.15. Substitute Loan Basis. (a) In the
event that the Majority Banks shall reasonably
determine (which determination shall be final and
conclusive and binding upon the Company) at any time
that (vi) by reason of changes affecting the London
Interbank Eurodollar Market, adequate and fair means do
not exist for ascertaining the rate of interest
applicable to any Tranche of Eurodollar Loans for any
requested Interest Period or (vii) the making of,
converting into or continuing for an additional
Interest Period of any Tranche of Eurodollar Loans has
been made impracticable by the occurrence of a
contingency which materially and adversely affects the
London Interbank Eurodollar Market then, and in any
such event, the Administrative Agent shall forthwith
give notice to the Company and, subject to the
provisions of subsection (b) of this Section 2.15 (x)
unless on the date upon which such Eurodollar Loans
were to be made the Company notifies the Administrative
Agent that it elects not to borrow on such date, any
Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Reference
Rated Loans or CD Rated Loans, as requested by the
Company by notice (setting forth, in the case of any
request that such Loans be made as CD Rated Loans, the
initial Interest Period with respect thereto) to the
Administrative Agent on the date upon which such Loans
are to be made, or, in the absence of any such request,
as Reference Rated Loans, (y) any Loans that were to
have been, on the first day of such Interest Period,
converted to or continued as Eurodollar Loans shall be
converted to or continued as Reference Rated Loans or
CD Rated Loans, as requested by the Company by notice
(setting forth, in the case of any request that such
Loans be converted to or continued as CD Rated Loans,
the next Interest Period with respect thereto) to the
Administrative Agent on the date upon which such Loans
were to have been converted or continued, or, in the
absence of any such request, as Reference Rated Loans,
and (z) any outstanding Eurodollar Loans shall be
converted, on the last day of the Interest Period
applicable thereto, to Reference Rated Loans or CD
Rated Loans, as requested by the Company by notice
(setting forth, in the case of any request that such
Loans be converted to CD Rated Loans, the initial
Interest Period with respect thereto) to the
Administrative Agent on the date upon which such Loans
are to be converted, or in the absence of any such
request, to Reference Rated Loans. The Administrative
Agent shall give written notice to the Company of any
event occurring after the giving of such notice which
permits an adequate and fair means of ascertaining the
rate of interest applicable to Eurodollar Loans and
until such notice by the Administrative Agent, no
further Eurodollar Loans shall be made or continued as
such, nor shall the Company have the right to convert
Loans to Eurodollar Loans.
(b) In the event that the Majority Banks shall
reasonably determine (which determination shall be
final and conclusive and binding upon the Company) at
any time that (viii) by reason of changes affecting the
market for domestic certificates of deposit of
commercial banks, adequate and fair means do not exist
for ascertaining the rate of interest applicable to any
Tranche of CD Rated Loans for any requested Interest
Period or (ix) the making of, converting into or
continuing for an additional Interest Period of any
Tranche of CD Rated Loans has been made impracticable
by the occurrence of a contingency which materially and
adversely affects the market for domestic certificates
of deposit of commercial banks then, and in any such
event, the Administrative Agent shall forthwith give
notice to the Company and, subject to the provisions of
subsection (a) of this Section 2.15 (x) unless on the
date upon which such CD Rated Loans were to be made,
the Company notifies the Administrative Agent that it
elects not to borrow on such date, any CD Rated Loans
requested to be made on the first day of such Interest
Period shall be made as Reference Rated Loans or
Eurodollar Loans, as requested by the Company by notice
(setting forth, in the case of any request that such
Loans be made as Eurodollar Loans, the initial Interest
Period with respect thereto) to the Administrative
Agent on the date of or two Working Days before, as the
case may be, such Loans are to be made, or, in the
absence of any such request, as Reference Rated Loans,
(y) any Loans that were to have been, on the first day
of such Interest Period, converted to or continued as
CD Rated Loans shall be converted to or continued as
Reference Rated Loans or Eurodollar Loans, as requested
by the Company by notice (setting forth, in the case of
any request that such Loans be converted to or
continued as Eurodollar Loans, the next Interest Period
with respect thereto) to the Administrative Agent on
the date upon or two Working Days before, as the case
may be, such Loans were to have been converted or
continued, or, in the absence of any such request, as
Reference Rated Loans and (z) any outstanding CD Rated
Loans shall be converted, on the last day of the
Interest Period applicable thereto, to Reference Rated
Loans or Eurodollar Loans, as requested by the Company
by notice (setting forth, in the case of any request
that such Loans be converted to Eurodollar Loans, the
initial Interest Period with respect thereto) to the
Administrative Agent on the date upon or two Working
Days before, as the case may be, the date upon which
such Loans are to be converted, or, in the absence of
any such request, to Reference Rated Loans. The
Administrative Agent shall give written notice to the
Company of any event occurring after the giving of such
notice which permits an adequate and fair means of
ascertaining the rate of interest applicable to CD
Rated Loans and until such notice by the Administrative
Agent, no further CD Rated Loans shall be made or
continued as such, nor shall the Company have the right
to convert Loans to CD Rated Loans.
Section 2.16. Certain Prepayments or Conversions
Pursuant to Sections 2.12 and 2.13. In the event that
Loans of any Bank of one Type are prepaid or converted
into Loans of another Type pursuant to Sections 2.12 or
2.13 (Loans of the former Type being herein called
AAffected Loans@), unless and until such Bank gives
written notice that the circumstances which gave rise
to such prepayment or conversion no longer exist (which
such Bank agrees to do promptly upon such circumstances
ceasing to exist) such Bank shall not make further
Affected Loans and all Loans which would otherwise be
made by such Bank as, or converted by such Bank into,
Affected Loans shall be made instead as, or converted
into or continued as, Loans of another Type (on which
interest and principal shall be payable simultaneously
with the related Affected Loans of the other Banks).
Section 2.17. Certain Notices. Notices by the
Company under each of Sections 2.03, 2.05, 2.06, 2.12,
2.15 and 2.21 and under the definition of AInterest
Period@ in Section 1.01 (a) shall be given in writing,
by telegraph, by telecopy or by telephone (confirmed
promptly in writing) and (b) shall be effective only if
received by the Administrative Agent and, in the case
of Section 2.12, the Bank involved, not later than
10:30 A.M. (New York City time) on the day specified in
the respective Section or definition as the latest day
such notice may be given. Notices by the Company under
each of Sections 2.03, 2.05, 2.06, 2.12, 2.15 and 2.21
shall be irrevocable.
Section 2.18. Use of Proceeds. The Company
agrees that the proceeds of the Loans obtained by the
Company hereunder shall be used for its general
corporate purposes, including working capital needs,
the repayment of indebtedness and loans to subsidiaries
and will not be used, directly or indirectly, or for
any other purpose which would result in a violation of
any law, rule or regulation, including Regulation U of
the Board of Governors of the Federal Reserve System,
known to the Company.
Section 2.19. Indemnity. The Company agrees to
indemnify each Bank and to hold such Bank harmless from
any loss (other than loss of margin after the date of
such default or prepayment) or expense which such Bank
may sustain or incur as a consequence of (a) default by
the Company in making a borrowing of, conversion into
or continuance of a Eurodollar Loan or CD Rated Loan
after the Company has given a notice requesting the
same in accordance with this Agreement, (b) default by
the Company in making any prepayment of a Eurodollar
Loan or a CD Rated Loan after the Company has given a
notice in accordance with Section 2.06 or (c) the
making by the Company of a prepayment or conversion of
a Eurodollar Loan or a CD Rated Loan on a day which is
not the last day of the Interest Period with respect
thereto, arising from the reemployment of funds
obtained by it to maintain its Eurodollar Loans or CD
Rated Loans hereunder or from fees payable to terminate
the deposits from which such funds were obtained. This
covenant shall survive termination of this Agreement
and payment of the Notes.
Section 2.20. Minimum Amounts of Tranches. All
borrowings, conversions and continuations of Loans
hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant
to such elections so that, after giving effect thereto,
the aggregate principal amount of the Loans comprising
each Tranche shall be equal to $10,000,000 or a whole
multiple of $5,000,000 in excess thereof.
Section 2.21. Conversion and Continuation
Options. (a) The Company may elect from time to time
to convert Eurodollar Loans or CD Rated Loans to
Reference Rated Loans by giving the Administrative
Agent irrevocable notice of such election on the date
of such conversion, provided that any such conversion
may only be made on the last day of an Interest Period
with respect to the Loans being converted. The Company
may elect from time to time to convert Reference Rated
Loans or Eurodollar Loans to CD Rated Loans by giving
the Administrative Agent irrevocable notice of such
election on the date of such conversion, provided that
any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect
thereto. The Company may elect from time to time to
convert Reference Rated Loans or CD Rated Loans to
Eurodollar Loans by giving the Administrative Agent at
least two Working Days irrevocable notice of such
election, provided that any such conversion of CD Rated
Loans may only be made on the last day of an Interest
Period with respect thereto. Any such notice of
conversion to Eurodollar Loans or CD Rated Loans shall
specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such
notice, the Administrative Agent shall promptly notify
each Bank thereof. All or any part of outstanding
Eurodollar Loans, CD Rated Loans and Reference Rated
Loans may be converted as provided herein, provided
that (x) no Loan may be converted into a Eurodollar
Loan or a CD Rated Loan at any time at which an Event
of Default has occurred and is continuing and (xi) any
conversion may only be made if, after giving effect
thereto, Section 2.20 shall not have been contravened.
(b) Any Eurodollar Loans or CD Rated Loans may be
continued as such upon the expiration of the then
current Interest Period with respect thereto by the
Company giving notice to the Administrative Agent, in
accordance with the applicable provisions of the term
AInterest Period@ set forth in Section 1.01, of the
length of the next Interest Period to be applicable to
such Loans, provided that (xii) no Loan may be
continued as a Eurodollar Loan or a CD Rated Loan for
an additional Interest Period at any time at which an
Event of Default has occurred or is continuing and
(xiii) no Eurodollar Loan or CD Rated Loan may be
continued as such if, after giving effect thereto,
Section 2.20 would be contravened and provided,
further, that if the Company shall fail to give any
required notice as described above in this section, or
if such conversion is not permitted pursuant to the
preceding proviso hereof, such Loans shall be
automatically converted to Reference Rated Loans on the
last day of such then expiring Interest Period.
Section 2.22. Increase of Commitments. (a) At
any time after the date hereof, provided that no Event
of Default shall have occurred and be continuing, the
Company may request an increase of the aggregate
Commitments by notice to the Administrative Agent in
writing of the amount of such proposed increase (such
notice, a ACommitment Increase Notice@). Any such
Commitment Increase Notice must offer each Bank the
opportunity to subscribe for its pro rata share of the
increased Commitments. If any portion of the increased
Commitments is not subscribed for by the Banks, the
Company may, in its sole discretion, but with the
consent of the Administrative Agent as to any Person
that is not at such time a Bank (which consent shall
not be unreasonably withheld or delayed), offer to any
existing Bank or to one or more additional banks or
financial institutions the opportunity to participate
in all or a portion of such unsubscribed portion of the
increased Commitments pursuant to paragraph (b) or (c)
below, as applicable.
(b) Any additional bank or financial institution
that the Company selects to offer participation in the
increased Commitments, and that elects to become a
party to this Agreement and obtain a Commitment, shall
execute a New Bank Agreement with the Company and the
Administrative Agent, whereupon such bank or financial
institution (a ANew Bank@) shall become a Bank for all
purposes and to the same extent as if originally a
party hereto and shall be bound by and entitled to the
benefits of this Agreement, and the signature pages
hereof shall be deemed to be amended to add the name of
such New Bank and the definition of Commitment in
Section 1.01 hereof shall be deemed amended to add the
name and Commitment of such New Bank, provided that the
Commitment of any such New Bank shall be in an amount
not less than $10,000,000.
(c) Any Bank that accepts an offer to it by the
Borrower to increase its Commitment pursuant to this
Section 2.22 shall, in each case, execute a Commitment
Increase Agreement with the Company and the
Administrative Agent, whereupon such Bank shall be
bound by and entitled to the benefits of this Agreement
with respect to the full amount of its Commitment as so
increased, and the definition of Commitment in Section
1.01 hereof shall be deemed to be amended to so
increase the Commitment of such Bank.
(d) The effectiveness of any New Bank Agreement or
Commitment Increase Agreement shall be contingent upon
receipt by the Administrative Agent of such corporate
resolutions of the Company and legal opinions of
counsel to the Company as the Administrative Agent
shall reasonably request with respect thereto, in each
case in form and substance reasonably satisfactory to
the Administrative Agent.
(e) If any bank or financial institution becomes a
New Bank pursuant to Section 2.22(b) or any Bank=s
Commitment is increased pursuant to Section 2.22(c),
additional Loans made on or after the effectiveness
thereof (the ARe-Allocation Date@) shall be made pro
rata based on their respective Commitments in effect on
and after such Re-Allocation Date (except to the extent
that any such pro rata borrowings would result in any
Bank making an aggregate principal amount of Loans in
excess of its Commitment, in which case such excess
amount will be allocated to, and made by, such New Bank
and/or Banks with such increased Commitments to the
extent of, and pro rata based on, their respective
Commitments), and continuations of Eurodollar Loans and
CD Rated Loans outstanding on such Re-Allocation Date
shall be effected by repayment of such Eurodollar Loans
and CD Rated Loans on the last day of the Interest
Period applicable thereto and the making of new
Eurodollar Loans and CD Rated Loans pro rata based on
the respective Commitments in effect on and after such
Re-Allocation Date. In the event that on any such Re-
Allocation Date there is an unpaid principal amount of
Reference Rated Loans, the Company shall make
prepayments thereof and borrowings of Reference Rated
Loans so that, after giving effect thereto, the
Reference Rated Loans outstanding are held pro rata
based on their respective Commitments in effect on and
after such Re-Allocation Date. In the event that on
any such Re-Allocation Date there is an unpaid
principal amount of Eurodollar Loans or CD Rated Loans,
such Eurodollar Loans or CD Rated Loans shall remain
outstanding with the respective holders thereof until
the expiration of their respective Interest Periods
(unless the Company elects to prepay any thereof in
accordance with the applicable provisions of this
Agreement), and interest on and repayments of such
Eurodollar Loans or CD Rated Loans will be paid thereon
to the respective Banks holding such Eurodollar Loans
or CD Rated Loans pro rata based on the respective
principal amounts thereof outstanding.
(f) Notwithstanding anything to the contrary in
this Section 2.22, (i) no Bank shall have any
obligation to increase its Commitment unless it agrees
to do so in its sole discretion and (ii) after giving
effect to any increase in the Commitments pursuant to
this Section 2.22, the aggregate amount of the
Commitments shall not exceed $350,000,000.
(g) The Company shall execute and deliver a Note to
each new bank or other financial institution becoming a
Bank.
ARTICLE 3
Representations and Warranties
Section 3.01. Representations and Warranties by
the Company. The Company represents and warrants to
each of the Banks that:
(a) Corporate Existence, Qualification. The Company
(xiv) has been duly incorporated and is validly
existing and in good standing under the laws of the
State of Delaware and (xv) is qualified to do business
as a foreign corporation and is in good standing in
each jurisdiction of the United States in which the
ownership of its properties or the conduct of its
business requires such qualification and where the
failure to so qualify would have a material adverse
effect upon the business of the Company and its
subsidiaries taken as a whole.
(b) Corporate Authorization and Binding Agreement.
This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and
binding agreement of the Company, enforceable in
accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency or similar laws
affecting creditors= rights generally and equitable
principles of general applicability. The Notes have
been duly authorized by the Company and, when executed,
issued and delivered pursuant hereto for value
received, will constitute valid and binding obligations
of the Company, enforceable in accordance with their
terms, except as (xvi) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws
affecting creditors= rights generally and (xvii) rights
of acceleration and the availability of equitable
remedies may be limited by equitable principles of
general applicability.
(c) No Conflicting Agreements. The execution,
delivery and performance of this Agreement and the
execution, issuance, delivery and performance of the
Notes will not conflict with any provision of (xviii)
the restated certificate of incorporation or by-laws of
the Company or (xix) any indenture, loan agreement or
other similar agreement or instrument binding on the
Company.
(d) Governmental Approvals. No authorization,
consent or approval of any governmental body or agency
is required for the valid execution, delivery and
performance of this Agreement by the Company or for the
valid execution, issuance, delivery and performance of
the Notes by the Company.
(e) Proceedings. To the knowledge of the Company,
there is no proceeding pending or threatened before any
court or administrative agency which, in the opinion of
the Company, will result in a final determination which
would have the effect of preventing the Company from
carrying on its business or from meeting its current
and anticipated obligations on a timely basis.
(f) Financial Position. The consolidated balance
sheets of the Company and its subsidiaries as of
December 31, 1998 and 1999, and the related
consolidated statements of income, stockholders= equity
and cash flows for each of the years in the three-year
period ended December 31, 1999, certified by KPMG LLP,
present fairly the consolidated financial position of
the Company and its subsidiaries at December 31, 1998
and 1999 and the results of their operations and their
cash flows for each of the years in the three-year
period ended December 31, 1999, in conformity with
generally accepted accounting principles applied on a
consistent basis. Since December 31, 1999, there has
been no material adverse change in the consolidated
financial position or results of operations of the
Company and its subsidiaries which would have the
effect of preventing the Company from carrying on its
business or from meeting its current and anticipated
obligations on a timely basis.
ARTICLE 4
Covenants of the Company
Section 4.01. Covenants. The Company covenants
and agrees that, from the date of this Agreement and
for so long as any of the Notes shall be outstanding or
any of the Banks shall have any Commitments:
(a) Financial Statements, Etc. The Company will
furnish to each Bank: (xx) within 15 days after the
Company is required to file the same with the
Commission, copies of the annual reports and of the
information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission
may from time to time by rules and regulations
prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if
the Company is not required to file information,
documents or reports pursuant to either of said
Sections, then such of the supplementary and periodic
information, documents and reports which may be
required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed
and registered on a national securities exchange as may
be prescribed from time to time in such rules and
regulations; (xxi) within 60 days after the close of
each of the first three quarters of each of the
Company=s fiscal years a statement by a responsible
officer of the Company stating whether to the knowledge
of the Company an event has occurred during such period
and is continuing which constitutes an Event of Default
or would constitute an Event of Default with the giving
of notice or the lapse of time, or both, and, if so,
stating the facts with respect thereto; (xxii) within
120 days after the close of each of the Company=s
fiscal years a statement by a responsible officer of
the Company stating whether to the knowledge of the
Company an event has occurred during such period and is
continuing which constitutes an Event of Default or
would constitute an Event of Default with the giving of
notice or the lapse of time, or both, and, if so,
stating the facts with respect thereto; (xxiii) within
five Business Days after the Company becomes aware of
the occurrence of any event which constitutes an Event
of Default, or would constitute an Event of Default
with the passage of time or the giving of notice, or
both, if such occurrence is then continuing notice of
such occurrence together with a statement by a
responsible officer of the Company stating the facts
with respect thereto; and (xxiv) such other information
respecting the financial condition or operations of the
Company and its subsidiaries as any Bank may from time
to time reasonably request.
(b) Limitations on Sales and Leasebacks. The
Company will not itself, and will not permit any
subsidiary to, enter into any arrangement with any
bank, insurance company or other lender or investor
(not including the Company or any subsidiary) or to
which any such lender or investor is a party, providing
for the leasing by the Company or a subsidiary for a
period, including renewals, in excess of three years,
of any Principal Property (as defined in the Public
Indenture) which has been or is to be sold or
transferred more than 180 days after the completion of
construction and commencement of full operation
thereof, by the Company or any subsidiary to such
lender or investor or to any Person to whom funds have
been or are to be advanced by such lender or investor
on the security of such Principal Property (herein
referred to as a Asale and leaseback transaction@)
unless either:
(i) the Company or such subsidiary could
create Indebtedness secured pursuant to Section
1005 of the Public Indenture on the Principal
Property to be leased back in an amount equal to
the Attributable Debt with respect to the lease
resulting from such sale and leaseback transaction
without equally and ratably securing the Notes; or
(ii) the Company within 180 days after the sale
or transfer shall have been made by the Company or
by a subsidiary, applies an amount equal to the
greater of (A) the net proceeds of the sale of the
Principal Property sold and leased back pursuant
to such arrangement or (B) the net amount (after
deducting applicable reserves) at which such
Principal Property is carried on the books of the
Company or such subsidiary at the time of entering
into such arrangement, to the retirement of
Indebtedness of the Company.
(c) Compliance with Indenture. The Company will
comply with the provisions of Sections 1004 and 1005 of
the Public Indenture (a true and complete copy of which
the Company hereby represents has been furnished to
each Bank), which provisions, together with related
definitions, are hereby incorporated herein by
reference for the benefit of the Banks and shall
continue in effect for purposes of this Section 4.01
regardless of termination, or any amendment or waiver
of, or any consent to any deviation from or other
modification of, the Public Indenture; provided,
however, that, for purposes of this Section 4.01, (a)
references in the Public Indenture to Athe Securities@
shall be deemed to refer to the obligations of the
Company to pay the principal of and interest on the
Notes, (b) references in the Public Indenture to Athe
Trustee@ shall be deemed to refer to the Administrative
Agent, (c) references in the Public Indenture to Athis
Indenture@ shall be deemed to refer to this Agreement
and (d) references in the Public Indenture to
Asupplemental indentures@ shall be deemed to refer to
supplements to this Agreement.
(d) Limitation on Mortgages. The Company will not
incur, issue, assume or guarantee any Indebtedness
secured by a mortgage on oil, gas, coal or other
minerals in place, or on related leasehold or other
property interest, which is incurred to finance
development or production costs if the aggregate amount
of all such indebtedness exceeds 10% of Consolidated
Net Tangible Assets (as defined in the Public
Indenture).
(e) Consolidated Stockholders' Equity. The Company
will maintain, at the end of each calendar quarter,
Consolidated Stockholders' Equity of at least
$650,000,000 exclusive of the effect of any noncash
writedowns made subsequent to the date hereof.
(f) [Intentionally omitted.]
(g) Indebtedness to Capitalization Ratio. At the
end of each calendar quarter, Consolidated Indebtedness
divided by Total Capital shall not exceed 60%. For
purposes of this provision "Total Capital" is equal to
the sum of Consolidated Stockholders' Equity, exclusive
of the effect of any noncash writedowns made subsequent
to the date hereof, plus Consolidated Indebtedness,
each at such time.
(h) Insurance. The Company will at all times
maintain, with financially sound and reputable
insurers, insurance of the kinds, covering the risks
and in the relative proportionate amounts customarily
carried by companies engaged in the same or similar
business and similarly situated.
ARTICLE 5
Conditions of Lending
Section 5.01. Conditions Precedent to
Effectiveness. The effectiveness of this Agreement is
subject to the conditions precedent that:
(I) Each Bank and the Administrative Agent shall
have received on or before the date of the initial
Loan:
(a) An appropriate Note payable to its order.
(b) Certified copies of the resolutions of the
Board of Directors or the Executive Committee of the
Board of Directors of the Company authorizing the
execution, delivery and performance of this Agreement
and the execution, issuance, delivery and performance
of the Notes.
(c) A favorable opinion of the General Counsel or
General Attorney of the Company, to the effect that:
(i) the Company is validly existing and in
good standing under the laws of the State of
Delaware;
(ii) the Company is qualified to do business as
a foreign corporation and is in good standing in
the States of Kansas, Louisiana, Oklahoma and
Texas;
(iii) this Agreement and the Notes have been
duly authorized, executed and delivered by the
Company;
(iv) the execution, delivery and performance by
the Company of this Agreement and the Notes will
not conflict with the restated certificate of
incorporation or by-laws of the Company, each as
in effect on the date of such opinion;
(v) the execution, delivery and performance of
this Agreement and the execution, issuance,
delivery and performance of the Notes will not (x)
contravene any applicable provision of any
applicable law or applicable order or (y) conflict
with any provision of any indenture, loan
agreement or other similar agreement or instrument
known to such counsel (having made due inquiry
with respect thereto) binding on the Company or
affecting its property;
(vi) this Agreement constitutes a valid and
binding agreement of the Company and the Notes
constitute valid and binding obligations of the
Company, in each case enforceable in accordance
with their respective terms, subject to the effect
of applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally and
equitable principles of general applicability;
(vii) no authorization, consent or approval of
any governmental body or agency of the State of
Texas or the United States of America which has
not been obtained is required in connection with
the execution, delivery and performance by the
Company of this Agreement and the Notes; and
(viii) to the knowledge of such counsel (having
made due inquiry with respect thereto), there is
no proceeding pending or threatened before any
court or administrative agency which, in the
opinion of such counsel, will result in a final
determination which would have the effect of
preventing the Company from carrying on its
business or from meeting its current and
anticipated obligations on a timely basis.
In rendering such opinion, the General Counsel or
General Attorney of the Company shall opine only as to
matters governed by the Federal laws of the United
States of America, the laws of the State of Texas and
the General Corporation Law of the State of Delaware.
Such counsel may also state that he has relied on
certificates of state officials as to qualification to
do business and good standing, certificates of officers
of the Company and other sources believed by him to be
responsible.
(d) A copy of a written irrevocable notice from the
Company terminating the Commitments, as defined in the
Credit Agreement, and directing the Administrative
Agent, as defined in the Credit Agreement, to prepay by
wire transfer, in immediately available funds, in full
any loans then outstanding thereunder, together with
accrued interest thereon and any unpaid commitment fees
then accrued.
(e) A certificate of a responsible officer of the
Company to the effect that:
(i) the representations and warranties
contained in Section 3.01 are true and accurate on
and as of such date as though made on and as of
such date (except to the extent that such
representations and warranties relate solely to an
earlier date);
(ii) no event has occurred and is continuing
which constitutes an Event of Default or would
constitute an Event of Default with the giving of
notice or lapse of time, or both; and
(iii) the Company is in compliance with all the
terms, covenants and conditions of this Agreement
which are binding upon it.
(II) The Administrative Agent shall have received,
for its account and the accounts of the several Banks,
all accrued fees that the Company shall have agreed in
writing to pay to the Administrative Agent and the
Banks prior to the date of the initial Loan.
Section 5.02. Conditions Precedent to Loans. The
obligation of each Bank to make any Loan is subject to
the further conditions precedent that:
(a) the Effective Date shall have occurred; and
(b) (i) the representations and warranties
contained in Section 3.01 and in any New Bank Agreement
or Commitment Increase Agreement are true and accurate
on and as of the relevant Borrowing Date as though made
on and as of such Borrowing Date (except to the extent
that such representations and warranties relate solely
to an earlier date);
(ii) no event has occurred and is continuing or
would result from the proposed borrowing, which
constitutes an Event of Default or would
constitute an Event of Default with the giving of
notice or lapse of time, or both; and
(iii) the Company is in compliance with all the
terms, covenants and conditions of this Agreement
which are binding upon it.
The borrowing on the relevant Borrowing Date shall
be deemed to constitute a certification by the Company
that the statements set forth in clause (b) above are
true.
ARTICLE 6
Events of Default
Section 6.01. Events of Default. If one or more
of the following events of default (AEvents of
Default@) shall occur and be continuing:
(a) the Company shall default in any payment of
principal of any Loan when due and such default shall
continue for a period of 3 days; or the Company shall
default in any payment of interest on any Loan, or in
the payment of any commitment or utilization fees
pursuant to Section 2.04, when due and payable, and
such default shall continue for a period of 10 days;
(b) any representation or warranty, or
certification made by the Company herein or in any New
Bank Agreement or Commitment Increase Agreement or any
statement or representation or certification made or
deemed to be made pursuant to Article 5 of this
Agreement shall prove to have been incorrect in any
material respect when made;
(c) the Company shall default in the performance of
any other term, condition, covenant or agreement
contained in this Agreement and such default shall
continue unremedied for a period of 30 days after
written notice thereof, specifying such default and
requiring it to be remedied, shall have been received
by the Company from any Bank,
(d) the Company shall default in the performance of
any term, condition, covenant or agreement contained in
the Public Indenture and such default shall have
resulted in any of the Securities (as defined in the
Public Indenture) being declared due and payable prior
to the date on which such Securities would otherwise
have become due and payable;
(e) the Company or any subsidiary shall (i) default
in the payment of principal of any Indebtedness in an
aggregate principal amount in excess of $25,000,000
(other than the Notes) beyond the period of grace, if
any, provided in the instrument or agreement under
which such Indebtedness was created as and when the
same shall become due and payable whether at maturity,
upon redemption, by declaration or otherwise, or (ii)
default in the observance or performance of any other
agreement or condition relating to any such
Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist
unremedied or unwaived, the effect of which default or
other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or
Administrative Agent on behalf of such holder or
holders) to cause, with the giving of notice if
required, but without the passage of any additional
time, such Indebtedness to become due prior to its
stated maturity,
(f) the Company shall (i) apply for or consent to
the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of itself or
of its property, (ii) admit in writing its inability to
pay its debts as such debts become due, (iii) make a
general assignment for the benefit of its creditors,
(iv) commence a voluntary case under the federal
Bankruptcy Code (as now or hereafter in effect), (v)
file a petition seeking to take advantage of any other
law providing for similar relief of debtors, or (vi)
consent or acquiesce in writing to any petition duly
filed against it in any involuntary case under such
Bankruptcy Code;
(g) a proceeding or case shall be commenced,
without the application or consent of the Company, in
any court of competent jurisdiction seeking (i) its
liquidation, reorganization, dissolution or winding up,
or the composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian,
liquidator or the like of it or of its assets, or (iii)
similar relief in respect of it, under any law
providing for the relief of debtors, and such
proceeding or case shall continue undismissed, or
unstayed and in effect, for a period of 60 days (or
such longer period, so long as the Company shall be
taking such action in good faith as shall be reasonably
necessary to obtain the timely dismissal or stay of
such proceeding or case); or an order for relief shall
be entered in an involuntary case under the federal
Bankruptcy Code (as now or hereafter in effect),
against the Company, or
(h) any Change in Control shall occur,
then and in each and every case the Majority Banks, by
notice in writing to the Company, may terminate the
Commitments of the Banks hereunder and/or declare the
unpaid balance of the Notes and any other amounts
payable hereunder to be forthwith due and payable and
thereupon such balance shall become so due and payable
without presentation, protest or further demand or
notice of any kind, all of which are hereby expressly
waived; provided that in the case of clause (f) or (g)
above the Commitments of the Banks hereunder shall
automatically terminate and the Notes and any other
amounts payable hereunder shall forthwith be due and
payable.
ARTICLE 7
The Agents, Lead Arranger and Book Manager
Section 7.01. Powers. Each Bank hereby
irrevocably appoints and authorizes the Administrative
Agent to act as its agent hereunder. The Administrative
Agent shall have and may exercise such powers hereunder
and under any agreement executed and delivered pursuant
to the terms hereof as are specifically delegated to
the Administrative Agent by the terms hereof or
thereof, together with such powers as are reasonably
incidental thereto. The Administrative Agent shall have
no duties or responsibilities except those expressly
set forth in this Agreement, and shall not by reason of
this Agreement have a fiduciary relationship with any
Bank.
Section 7.02. Administrative Agent=s Reliance,
Etc. In performing its duties as Administrative Agent
hereunder and under any agreement executed and
delivered pursuant to the terms hereof, the
Administrative Agent shall take the same care as it
takes in connection with loans in which it alone is
interested. However, the Administrative Agent nor any
of its directors, officers, agents or employees shall
be liable for any action taken or omitted to be taken
by them hereunder or thereunder or in connection
herewith or therewith except for their own gross
negligence or willful misconduct.
Section 7.03. No Responsibility for Recitals,
Etc. Neither any Agent, the Lead Arranger nor the Book
Manager shall be responsible to the Banks for any
recitals, statements, warranties or representations
herein or under any agreement executed and delivered
pursuant to the terms hereof, for the value,
effectiveness, genuineness, enforceability or
sufficiency of this Agreement, the Notes or any
agreement executed and delivered pursuant hereto or be
bound to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement on the
part of the Company or of any of the terms of any such
other agreement by any party thereto.
Section 7.04. Right to Indemnity. The
Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder or
under any agreement executed and delivered pursuant to
the terms hereof unless it shall first be indemnified
(upon requesting such indemnification) to its
satisfaction by the Banks against any and all liability
and expense which it may incur by reason of taking or
continuing to take any such action. The Banks agree to
indemnify the Agents, to the extent not reimbursed by
the Company under this Agreement, ratably in accordance
with the aggregate principal amount of the Loans made
by them (or, if no Loans are outstanding, ratably in
accordance with their respective Commitments), for any
and all liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the
Agents as agents in any way relating to or arising out
of this Agreement, the Notes or any other documents
contemplated by or referred to herein or the
transactions contemplated hereby (including, without
limitation, the costs and expenses which the Company is
obligated to pay under this Agreement but excluding,
unless an Event of Default has occurred and is
continuing, normal administrative costs and expenses
incident to the performance of its agency duties
hereunder) or the enforcement of any of the terms
hereof or thereof or of any such other documents;
provided no such liability, obligation, damage,
penalty, action, judgment, suit, cost, expense or
disbursement results from any Agent=s gross negligence
or willful misconduct; provided, however, that, in the
event an Agent receives indemnification from the Banks
hereunder with respect to costs and expenses which the
Company is obligated to pay under this Agreement, such
Agent shall remit to the Banks the amount of such costs
and expenses to the extent subsequently paid by the
Company, such remittance to be in accordance with the
proportionate amount of the indemnification made by
each respective Bank.
Section 7.05. Action on Instructions of Banks.
The Administrative Agent shall in all cases be fully
protected in acting or refraining from acting hereunder
or under any agreement executed and delivered pursuant
to the terms hereof in accordance with written
instructions to it signed by the Majority Banks, and
(subject to Section 8.01) such instructions and any
action taken or failure to act pursuant thereto shall
be binding on all of the Banks.
Section 7.06. Employment of Agents. The
Administrative Agent may employ agents and attorneys-in-
fact and shall not be answerable, except as to money or
securities received by them or their authorized agents,
for the default or misconduct of any such agent or
attorney-in-fact selected by it with reasonable care.
Section 7.07. Reliance on Documents. The
Administrative Agent shall be entitled to rely upon (a)
any paper or document believed by it to be genuine and
to have been signed or sent by the proper person or
persons and (b) the opinion of its counsel with respect
to legal matters. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for
all purposes hereof unless and until a notice of the
assignment or transfer thereof satisfactory to the
Administrative Agent signed by such payee shall have
been filed with the Administrative Agent.
Section 7.08. Rights as Banks. With respect to
its Commitment and the Loans made by it, each Agent
shall have the same rights and powers hereunder and
under any agreement executed and delivered pursuant to
the terms hereof as any Bank and may exercise the same
as though it were not an Agent and the term ABank@ or
ABanks@ shall, unless the context otherwise indicates,
include the Agents in their capacities as a Banks
hereunder and thereunder. The Agents and their
respective affiliates may accept deposits from, lend
money to, and generally engage in any kind of banking
or trust business with the Company, its subsidiaries
and its affiliates as if they were not Agents.
Section 7.09. Non-reliance on Agents or Other
Banks. Each Bank agrees that it has, independently and
without reliance on any Agent, the Lead Arranger, the
Book Manager or on any other Bank, and based on such
documents and information as it has deemed appropriate,
made its own credit analysis of the Company and
decision to enter into this Agreement and that it will,
independently and without reliance upon any Agent, the
Lead Arranger, the Book Manager or any other Bank, and
based on such documents and information as it shall
deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action
under this Agreement or the Notes. Neither the Agents,
the Lead Arranger nor the Book Manager shall be
required to keep themselves informed as to the
performance or observance by the Company of this
Agreement or any other document referred to or provided
for herein or therein or to inspect the properties or
books of the Company. Except for notices, reports and
other documents expressly required to be furnished to
the Banks by the Administrative Agent hereunder,
neither the Agents, the Lead Arranger nor the Book
Manager shall have any duty or responsibility to
provide any Bank with any credit or other information
concerning the affairs, financial condition or business
of the Company or which may at any time come into
possession of any Agent, the Lead Arranger, the Book
Manager or any of their affiliates.
Section 7.10. Events of Default. In the event
the Administrative Agent receives actual knowledge of
an Event of Default hereunder, the Administrative Agent
shall promptly inform the Banks thereof. The
Administrative Agent shall not be deemed to have actual
knowledge of an Event of Default hereunder until it
shall have received a written notice from the Company
or any Bank referring to this Agreement, describing
such Event of Default and stating that such notice is a
ANotice of Default@.
Section 7.11. Successor Administrative Agent. If
the Administrative Agent shall resign as Administrative
Agent under this Agreement, or shall cease to be a Bank
under this Agreement, then the Banks shall appoint any
Bank which is a party to this Agreement (with the
consent of such Bank) as successor Administrative Agent
for the Banks under this Agreement, whereupon such
successor Administrative Agent shall succeed to the
rights, powers and duties of the Administrative Agent,
and the former Administrative Agent=s rights, powers
and duties as Administrative Agent shall be terminated
and cancelled, without any other or further act or deed
on the part of such former Administrative Agent or any
of the parties to this Agreement.
Section 7.12. Syndication and Documentation
Agents, Lead Arranger and Book Manager. Nothing in
this Agreement shall impose upon the Documentation
Agent, the Syndication Agent, the Lead Arranger or Book
Manager in such capacity, any duties or obligations
whatsoever.
ARTICLE 8
Miscellaneous
Section 8.01. Modifications, Consents and
Waivers. To the extent permitted by law, no failure or
delay on the part of the Banks in exercising any power
or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such
right or power preclude any other or further exercise
thereof or the exercise of any other right or power
hereunder. No modification or waiver of any provision
of this Agreement or of the Notes nor consent to any
departure by the Company therefrom shall in any event
be effective unless the same shall be in writing and
signed by the Majority Banks, and then such waiver or
consent shall be effective only in the specific
instance and for the purpose for which given; provided,
however, that no such modification, waiver or consent
may be made which will (a) extend the time for payment
of principal of or interest on any Loan or reduce the
principal amount of or rate of interest on any Loan or
otherwise affect the terms of payment of the principal
of or interest on any Loan without the written consent
of the holder of such Loan or increase the amount or
extend the term of any Bank's Commitment without the
written consent of such Bank or (b) affect the terms of
or reduce the amount of the commitment fee or reduce
the percentage of 66 2/3% specified in the definition
of "Majority Banks" or amend the provisions of this
Section 8.01 without the written consent of the holders
of all Loans at the time outstanding (or, if no Loans
are then outstanding, all of the Banks). No notice to
or demand on the Company in any case shall, of itself,
entitle the Company to any other or further notice or
demand in similar or other circumstances.
Section 8.02. Confidentiality. Each Bank shall
maintain in confidence and not publish, disseminate or
disclose in any manner or to any Person and shall not
use any nonpublic information relating to the Company
and its subsidiaries which may be furnished pursuant to
this Agreement (hereinafter collectively called
AConfidential Information@), subject to each Bank's (a)
obligation to disclose any such Confidential
Information pursuant to a request or order under
applicable laws and regulations or pursuant to a
subpoena or other legal process, (b) right to disclose
any such Confidential Information to bank examiners,
its affiliates, auditors, counsel and other
professional advisors, (c) right to use any such
Confidential Information in connection with evaluating
the transactions set forth herein, and (d) right to
disclose any such Confidential Information in
connection with any litigation involving the Banks and
the Company, provided, however, that Confidential
Information disclosed pursuant to clause (b) or (d) of
this sentence shall be so disclosed subject to such
procedures as are reasonably calculated to maintain the
confidentiality thereof, and provided, further, that
Confidential Information disclosed pursuant to
applicable laws, regulations, subpoenas or other legal
process shall be so disclosed subject to such
confidentiality provisions, if any, as may be provided
under applicable law. The Banks agree, to the extent
permitted by applicable law, to use their best efforts
promptly to notify the Company in writing of each
order, subpoena or other legal process providing for
the disclosure and/or production of Confidential
Information and shall, to the extent permitted by
applicable law, use their best efforts promptly to
supply the Company with a copy of such order, subpoena
or other legal process, in order that the Company may
intervene in the relevant administrative or legal
proceeding or take other appropriate legal action to
protect the confidentiality of such Confidential
Information.
Section 8.03. Addresses for Notices. Except as
otherwise provided herein, all communications and
notices provided for hereunder shall be in writing and,
if to the Company, mailed to P.O. Box 1330, Houston,
Texas 77251-1330 Attention: Treasurer, and, if to the
Administrative Agent, delivered or mailed to 270 Park
Avenue, New York, New York 10017 (Attention: Global Oil
and Gas), with a copy delivered or mailed to Munivan
Appanora, Agency Services, Chase Bank of Texas, N.A.,
One Chase Manhattan Plaza, 8th Floor, New York, New
York 10081, and, if to any Bank, delivered or mailed to
its address as set forth on the signature pages hereof,
or, as to any party, at such other address as such
party may designate in writing to each party concerned.
Except as otherwise provided herein, all communications
and notices provided for hereunder shall be effective
when deposited in the mails, postage prepaid, addressed
as aforesaid.
Section 8.04. Costs, Expenses and Taxes. The
Company agrees to pay all costs and expenses of the
Administrative Agent in connection with the
preparation, execution and delivery of this Agreement
and the Notes (including the reasonable fees of Messrs.
Simpson Thacher & Bartlett, special counsel to the
Administrative Agent) and costs and expenses, if any,
of the Banks in connection with the enforcement of this
Agreement and the Notes, as well as any and all stamp
and other taxes payable or determined to be payable in
connection with the execution or delivery of this
Agreement or the Notes, and to save the holders of the
Notes harmless from any and all liabilities with
respect to or resulting from any delay or omission to
pay such taxes, if any, which may be payable or
determined to be payable in connection with the
execution and delivery of this Agreement or the Notes.
Section 8.05. Binding Effect and Assignment.
This Agreement shall be binding upon and inure to the
benefit of the Company and the Banks and their
respective successors and assigns, except that the
Company may not assign or transfer its rights hereunder
without prior written consent of the Banks. A Bank may
not assign or transfer its rights hereunder, subject to
any legal or regulatory requirements, without prior
written consent of the Company, provided, however, that
each Bank may at any time grant participations in its
Loans and its Commitment (AParticipations@) to other
Persons (such Persons being herein called
AParticipants@). The Company agrees that each
Participant shall be deemed to be a ABank@ for purposes
of Sections 2.12(a), 2.14 and 2.19 with respect to its
Participations outstanding from time to time. Each Bank
agrees with the Company that (a) each such
Participation shall be created in the ordinary course
of the commercial banking business of such Bank and (b)
such Participation shall be created by such Bank in
compliance with all applicable laws. Each Bank agrees
that the creation of Participations shall require no
action on the part of the Company. The creation of a
Participation shall not give any Participant any rights
under this Agreement or any Note nor shall it relieve
any Bank of its obligations under this Agreement. Each
assignment will be subject to the payment of a service
fee of $3,000 to the Administrative Agent by the
parties to such assignment.
Section 8.06. Termination and Substitution of
Bank. (a) If (i) the obligation of any Bank to make,
convert Loans into or continue Eurodollar Loans has
been suspended pursuant to Section 2.13, (ii) any Bank
has demanded compensation under Section 2.12 or (iii)
any Bank shall decline to extend its Commitment
pursuant to Section 2.05(c), the Company may, upon
three Business Days= notice to such Bank through the
Administrative Agent, prepay in full all of the
outstanding Loans of such Bank, or its assignee,
together with accrued interest thereon to the date of
prepayment and all other amounts payable hereunder to
such Bank accrued to the date of prepayment, and
concurrently therewith terminate this Agreement with
respect to such Bank by giving notice of such
termination to the Administrative Agent and such Bank.
(b) If any Bank shall become a Defaulting Bank, the
Company may, in its sole discretion and without
prejudice to any right or remedy that the Company may
have against such Defaulting Bank with respect to, on
account of, arising from or relating to any event
pursuant to which such Bank shall be a Defaulting Bank,
upon notice to such Defaulting Bank and the
Administrative Agent, (i) if at such time there are no
Loans of such Defaulting Bank outstanding, terminate
this Agreement with respect to such Defaulting Bank, or
(ii) if at such time such Defaulting Bank shall have
Loans outstanding, subject to obtaining a substitute
bank or banks to assume the Commitment of such
Defaulting Bank pursuant to subsection (c) below,
terminate this Agreement with respect to such
Defaulting Bank and prepay in full the outstanding
Loans of such Defaulting Bank together with accrued
interest to the date of prepayment, provided that the
provisions of Section 2.19 shall not apply to any such
prepayment.
(c) If the Company terminates this Agreement with
respect to any Bank under this Section 8.06, the
Company shall use its best efforts, with the assistance
of the Administrative Agent, to seek a mutually
satisfactory substitute bank or banks (which may be one
or more of the Banks) to assume the Commitment of such
relevant Bank.
Section 8.07. Governing Law. This Agreement
shall be governed by, and construed in accordance with,
the laws of the State of New York.
Section 8.08. Headings. Article and Section
headings used in this Agreement are for convenience
only and shall not affect the construction of this
Agreement.
Section 8.09. Execution in Counterparts. This
Agreement may be executed by the parties hereto
individually or in any combinations of the parties
hereto in several separate counterparts, each of which
shall be an original, and all of which taken together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective
officers thereunto duly authorized as of the day and
year first above written.
ANADARKO PETROLEUM CORPORATION
By:__________________________
_____
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
and as a Bank
By:__________________________
_____
Name:
Title:
BANK OF AMERICA, N.A.,
as Syndication Agent and
as a Bank
By:__________________________
_____
Name:
Title:
CITIBANK, N.A.,
as Documentation Agent and
as a Bank
By:__________________________
_____
Name:
Title:
BANK ONE, N.A.
By:__________________________
_____
Name:
Title:
ROYAL BANK OF CANADA
By:__________________________
_____
Name:
Title:
BANK OF TOKYO - MITSUBISHI,
LTD.
By:__________________________
_____
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:__________________________
_____
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By:__________________________
_____
Name:
Title:
MELLON BANK, N.A.
By:__________________________
_____
Name:
Title:
WACHOVIA BANK, N.A.
By:__________________________
_____
Name:
Title:
PRICING SCHEDULE
The AEurodollar Margin@, ACD Margin@ and
"Commitment Fee Rate" for any day are the respective
percentages set forth below in the applicable row under
the column corresponding to the Level that exists on
such day:
LEVEL I LEVEL II LEVEL LEVEL IV LEVEL V LEVEL VI
III
Eurodoll 22.5/100 25/100 37.5/100 50/100 62.5/100 87.5/100
ar of 1% of 1% of 1% of 1% of 1% of 1%
Margin
CD Margin 35/100 37.5/100 50/100 62.5/100 75/100 100/100
of 1% of 1% of 1% of 1% of 1% of 1%
Commitment 6/100 of 8/100 of 10/100 12.5/100 15/100 20/100
Fee 1% 1% of 1% of 1% of 1% of 1%
For purposes of this Schedule, the following terms
have the following meanings:
ALevel@ refers to the determination of which of
Level I, Level II, Level III, Level IV, Level V or
Level VI exists at any date. The higher rating of S&P
or Moodys will determine the Level to be used.
"Level I" exists at any date if, at such date, the
Company's long-term debt is rated A or higher by S&P or
A2 or higher by Moodys.
"Level II" exists at any date if, at such date,
the Company's long-term debt is rated AC by S&P or A3
by Moodys.
"Level III" exists at any date if, at such date,
the Company's long-term debt is rated BBB+ by S&P or
Baa1 by Moodys.
"Level IV" exists at any date if, at such date,
the Company's long-term debt is rated BBB by S&P or
Baa2 by Moodys.
"Level V" exists at any date if, at such date, the
Company's long-term debt is rated BBBC by S&P or Baa3
by Moodys.
"Level VI" exists at any date if, at such date,
the Company's long-term debt is rated below BBBC by S&P
and Baa3 by Moodys.
The credit ratings to be utilized for purposes of
this Schedule are those assigned to the senior
unsecured long-term debt securities of the Company
without third-party credit enhancement, and any rating
assigned to any other debt securities of the Company
shall be disregarded. The rating in effect at any date
is that in effect at the close of business on such
date. At any time senior unsecured long-term
securities of the Borrower without third-party credit
enhancement are not rated by either S&P or Moody=s, the
applicable Commitment Fee Rate, Eurodollar Margin and
CD Margin shall be that set forth under Level VI.
EXHIBIT A
[FORM OF NOTE]
New York, New York
_____________, 200_
For value received, ANADARKO PETROLEUM
CORPORATION, a Delaware corporation (the "Company"),
promises to pay on the Maturity Date, to the order of
________________ (the "Bank") at the office of The
Chase Manhattan Bank specified in Section 2.11 of the
364-Day Credit Agreement, dated as of April 14, 2000,
among the Company, the Bank, the several other banks
party thereto, Bank of America, N.A., as Syndication
Agent, Citibank, N.A., as Documentation Agent, Chase
Securities Inc., as Lead Arranger and as Book Manager,
and The Chase Manhattan Bank, as Administrative Agent
(as amended, supplemented or modified from time to time
hereafter, the AAgreement@; terms defined in the
Agreement shall have their defined meanings when used
in this Note), in lawful money of the United States of
America, the aggregate unpaid principal amount of all
Loans made by the Bank to the undersigned pursuant to
Section 2.01 of the Agreement. The undersigned further
agrees to pay interest at said office, in like money,
on the unpaid principal amount owing hereunder from
time to time from the date hereof at the rates
specified in Section 2.09 of the Agreement. Such
interest shall be payable on the dates specified in
Section 2.09 of the Agreement. The date, Type and
amount of each Loan made by the Bank pursuant to
Section 2.01 of the Agreement, each continuation
thereof, each conversion of all or a portion thereof to
another Type and the date and amount of each payment of
principal with respect thereto shall be endorsed by the
holder of this Note on Schedule A annexed hereto, which
holder may add additional pages to such Schedule. No
failure to make or error in making any such endorsement
as authorized hereby shall affect the validity of the
obligations of the Company hereunder or the validity of
any payment hereof made by the Company.
This Note is one of the Notes referred to in the
Agreement and is entitled to the benefits thereof and
is subject to prepayment in whole or in part as
provided therein.
Upon the occurrence of any one or more of the
Events of Default specified in the Agreement, all
amounts then remaining unpaid on this Note may be
declared to be immediately due and payable as provided
in the Agreement.
ANADARKO PETROLEUM CORPORATION
By:__________________________
_____
Title:
SCHEDULE A
LOANS AND REPAYMENTS
Amount Type Intere Amount Notati
of of st of on
Loan Loan Rate Principa Made
Date l by
Repaid
EXHIBIT B
EXTENSION AGREEMENT
Anadarko Petroleum Corporation
17001 Northchase Drive
Houston, Texas 77251-1330
Attention: Treasurer
The Chase Manhattan Bank, as Administrative Agent
under the Credit Agreement referred to below
270 Park Avenue
New York, NY 10017
Attention: Energy Division
Gentlemen:
The undersigned hereby agree to extend, effective
on the date upon which Banks having 100% of the
Commitments then outstanding (after giving effect to
any assignments or terminations made as contemplated in
Section 2.05(c) of the 364-Day Credit Agreement dated
as of April 14, 2000 among Anadarko Petroleum
Corporation, the Banks listed therein, Bank of America,
N.A., as Syndication Agent, Citibank, N.A., as
Documentation Agent, Chase Securities Inc., as Lead
Arranger and as Book Manager, and The Chase Manhattan
Bank, as Administrative Agent, (as amended,
supplemented or modified from time to time, the "Credit
Agreement")) shall have executed this Extension
Agreement (the "Extension Date"), the Termination Date
under the Credit Agreement shall be extended to the
date that is 364 days from the Extension Date. Terms
defined in the Credit Agreement are used herein as
therein defined.
This Extension Agreement shall be construed in
accordance with and governed by the laws of the State
of New York.
THE CHASE MANHATTAN BANK
By:
Title:
[NAME OF BANK]*
By:
Title:
Agreed and accepted:
ANADARKO PETROLEUM CORPORATION
By:
Title:
THE CHASE MANHATTAN BANK, as Administrative Agent
By:
Title:
* Repeat for each Bank.
EXHIBIT C
FORM OF
NEW BANK AGREEMENT
This New Bank Agreement dated as of
______________, _____ (this "Agreement") is by and
among (i) Anadarko Petroleum Company (the ACompany@),
(ii) The Chase Manhattan Bank, in its capacity as
administrative agent (the "Administrative Agent") under
the 364-Day Credit Agreement dated as of April 14, 2000
(as the same may be amended or otherwise modified from
time to time, the ACredit Agreement@; capitalized terms
that are defined in the Credit Agreement and not
defined herein are used herein as therein defined)
among the Company, the Banks party thereto, Bank of
America, N.A., as Syndication Agent, Citibank, N.A., as
Documentation Agent, Chase Securities Inc., as Lead
Arranger and as Book Manager, and the Administrative
Agent, and (iii) _______________ ("New Bank").
Preliminary Statements
(A) Pursuant to Section 2.22 of the Credit
Agreement, the Company has the right, subject to
the terms and conditions thereof, to effectuate
from time to time an increase in the total
Commitments under the Credit Agreement by adding
to the Credit Agreement one or more banks or other
financial institutions.
(B) The Company has given notice to the
Administrative Agent of its intention to increase
the total Commitments pursuant to such Section
2.22 by adding the New Bank to the Credit
Agreement as a Bank with a Commitment of
$________________, and the Administrative Agent is
willing to consent thereto.
Accordingly, the parties hereto agree as follows:
Section 1. 2Addition of New Bank. Pursuant to
Section 2.22 of the Credit Agreement, the New Bank is
hereby added to the Credit Agreement as a Bank with a
Commitment of $______________. The New Bank specifies
as its Domestic Lending Office and Eurodollar Lending
Office the following:
Domestic Lending Office:
Address:
Attention:
Telephone:
Telecopy:
Eurodollar Lending Office:
Address:
Attention:
Telephone:
Telecopy:
Section 2. New Note. The Company agrees to
promptly execute and deliver to the New Bank a Note
(ANew Note@).
Section 3. Consent. The Administrative Agent and
the Company hereby consent to the increase in the
Commitments and addition of the New Bank effectuated
hereby.
Section 4. Governing Law. This Agreement shall
be governed by, and construed in accordance with, the
laws of the State of New York.
Section 5. Execution in Counterparts. This
Agreement may be executed in any number of counterparts
and by different parties hereto in separate
counterparts, each of which when so executed shall be
deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 6. Bank Credit Decision. The New Bank
acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other
Bank and based on the financial statements referred to
in Section 3.01(f) of the Credit Agreement and such
other documents and information as it has deemed
appropriate, made its own credit analysis and decision
to enter into this Agreement and to agree to the
various matters set forth herein. The New Bank also
acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other
Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action
under the Credit Agreement.
Section 7. Representation and Warranties of the
Company. The Company represents and warrants as
follows:
(a) The execution, delivery and performance by the
Company of this Agreement and the New Note are within
the Company's corporate powers, have been duly
authorized by all necessary corporate action, and do
not contravene (i) the Company's restated certificate
of incorporation or by-laws or (ii) any indenture, loan
agreement or other similar agreement or instrument
binding on the Borrower.
(b) No authorization, consent or approval of any
governmental body or agency is required for the valid
execution, delivery and performance of this Agreement
by the Company or for the valid execution, issuance,
delivery and performance of the New Note by the
Company.
(c) This Agreement constitutes a valid and binding
agreement of the Company, enforceable against the
Company in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and equitable
principles of general applicability. The New Note,
when executed, issued and delivered hereunder for value
received, will constitute a valid and binding
obligation of the Company, enforceable in accordance
with its terms, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and
(ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable
principles of general applicability.
(d) The aggregate amount of the Commitments under
the Credit Agreement, including any increases pursuant
to Section 2.22 thereof, does not exceed $350,000,000.
(e) No event has occurred and is continuing which
constitutes an Event of Default.
(f) Prior to the increase in Commitment pursuant to
this Agreement, the Company has offered the Banks the
right to participate in such increase by increasing
their respective Commitments.
Section 8. Expenses. The Company agrees to pay
on demand all costs and expenses of the Administrative
Agent in connection with the preparation, negotiation,
execution and delivery of this Agreement and the New
Note, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the
Administrative Agent with respect thereto.
Section 9. Effectiveness. When, and only when,
the Administrative Agent shall have received
counterparts of, or telecopied signature pages of, this
Agreement executed by the Company, the Administrative
Agent and the New Bank, this Agreement shall become
effective as of the date first written above.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date
first above written.
ANADARKO PETROLEUM
CORPORATION
By:
_____________________________
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
_____________________________
Name:
Title:
NEW BANK:
By:
_____________________________
Name:
Title:
EXHIBIT D
FORM OF
COMMITMENT INCREASE AGREEMENT
This Commitment Increase Agreement dated as of
___________, ____ (this "Agreement") is by and among
(i) Anadarko Petroleum Company (the "Company"), (ii)
The Chase Manhattan Bank, in its capacity as
administrative agent (the "Administrative Agent") under
the 364-Day Credit Agreement dated as of April 14, 2000
(as the same may be amended or otherwise modified from
time to time, the "Credit Agreement"; capitalized terms
that are defined in the Credit Agreement and not
defined herein are used herein as therein defined)
among the Company, the Banks party thereto, Bank of
America, N.A., as Syndication Agent, Citibank, N.A., as
Documentation Agent, Chase Securities Inc., as Lead
Arranger and as Book Manager, and the Administrative
Agent and (iii) _______________ ("Increasing Bank").
Preliminary Statements
(A) Pursuant to Section 2.22 of the Credit
Agreement, the Company has the right, subject to
the terms and conditions thereof, to effectuate
from time to time an increase in the total
Commitments under the Credit Agreement by agreeing
with a Bank to increase that Bank's Commitment.
(B) The Company has given notice to the
Administrative Agent of its intention to increase
the total Commitments pursuant to such Section
2.22 by increasing the Commitment of the
Increasing Bank from $________ to $________, and
the Administrative Agent is willing to consent
thereto.
Accordingly, the parties hereto agree as follows:
Section 1. 3Increase of Commitment. Pursuant to
Section 2.22 of the Credit Agreement, the Commitment of
the Increasing Bank is hereby increased from
$_________________ to $________________.
Section 2. Consent. The Administrative Agent
hereby consents to the increase in the Commitment of
the Increasing Bank effectuated hereby.
Section 3. Governing Law. This Agreement shall
be governed by, and construed in accordance with, the
laws of the State of New York.
Section 4. Execution in Counterparts. This
Agreement may be executed in any number of counterparts
and by different parties hereto in separate
counterparts, each of which when so executed shall be
deemed to be an original and all of which taken
together shall constitute one and the same agreement.
Section 5. Increasing Bank Credit Decision. The
Increasing Bank acknowledges that it has, independently
and without reliance upon the Administrative Agent or
any other Bank and based on the financial statements
referred to in Section 3.01(f) of the Credit Agreement
and such other documents and information as it has
deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and to agree to
the various matters set forth herein. The Increasing
Bank also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any
other Bank and based on such documents and information
as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking
action under the Credit Agreement.
Section 6. Representation and Warranties of the
Company. The Company represents and warrants as
follows:
(a) The execution, delivery and performance by the
Company of this Agreement are within the Company's
corporate powers, have been duly authorized by all
necessary corporation action and do not contravene (i)
the Company's restated certificate of incorporation or
by-laws or (ii) any indenture, loan agreement or other
similar agreement or instrument binding on the Company.
(b) No authorization, consent or approval any
governmental body or agency is required for the valid
execution, delivery and performance by the Company of
this Agreement.
(c) This Agreement constitutes a valid and binding
agreement of the Company enforceable against the
Company in accordance with its terms, subject to
applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and equitable
principles of general applicability.
(d) The aggregate amount of the Commitments under
the Credit Agreement, including any increases pursuant
to Section 2.22 thereof, does not exceed $350,000,000.
(e) No event has occurred and is continuing which
constitutes an Event of Default.
Section 7. Expenses. The Company agrees to pay
on demand all costs and expenses of the Administrative
Agent in connection with the preparation, negotiation,
execution and delivery of this Agreement, including,
without limitation, the reasonable fees and out-of-
pocket expenses of counsel for the Administrative Agent
with respect thereto.
Section 8. Effectiveness. When, and only when,
the Administrative Agent shall have received
counterparts of, or telecopied signature pages of, this
Agreement executed by the Company, the Administrative
Agent and the Increasing Bank, this Agreement shall
become effective as of the date first written above.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed by their respective
officers thereunto duly authorized, as of the date
first above written.
BORROWER:
By:
___________________________
Name:
Title:
ADMINISTRATIVE AGENT:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
___________________________
Name:
Title:
INCREASING BANK:
By:
___________________________
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT 12
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF COMPUTATION OF RATIOS OF
EARNINGS TO FIXED CHARGES AND EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
Three Months Ended March 31, 2000 and Five Years Ended December 31, 1999
<TABLE>
<CAPTION>
Three Months
Ended
March 31 Years Ended December 31
thousands 2000 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Gross Income $105,397 $178,941 $ (7,388) $205,318 $196,763 $65,624
Rentals 3,038 11,120 12,477 8,266 4,234 2,457
Earnings 108,435 190,061 5,089 213,584 200,997 68,081
Gross Interest Expense 26,190 96,116 82,415 62,095 55,986 52,557
Rentals 3,038 11,120 12,477 8,266 4,234 2,457
Fixed Charges $ 29,228 $107,236 $ 94,892 $ 70,361 $ 60,220 $55,014
Preferred Stock
Dividends 4,266 17,063 10,951 -- -- --
Combined Fixed Charges
and Preferred Stock
Dividends $ 33,494 $124,299 $105,843 $ 70,361 $ 60,220 $55,014
Ratio of Earnings to
Fixed Charges 3.71 1.77 0.05 3.04 3.34 1.24
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends 3.24 1.53 0.05 3.04 3.34 1.24
</TABLE>
These ratios were computed by dividing earnings by either fixed charges or
combined fixed charges and preferred stock dividends. For this purpose,
earnings include income before income taxes and fixed charges. Fixed
charges include interest and amortization of debt expenses and the
estimated interest component of rentals. Preferred stock dividends are
adjusted to reflect the amount of pretax earnings required for payment.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000773910
<NAME> ANADARKO PETROLEUM CORPORATION
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 9,369
<SECURITIES> 0
<RECEIVABLES> 277,533
<ALLOWANCES> 0
<INVENTORY> 32,133
<CURRENT-ASSETS> 322,726
<PP&E> 6,095,154
<DEPRECIATION> 2,287,451
<TOTAL-ASSETS> 4,219,841
<CURRENT-LIABILITIES> 297,165
<BONDS> 1,573,217
0
200,000
<COMMON> 13,008
<OTHER-SE> 1,373,621
<TOTAL-LIABILITY-AND-EQUITY> 4,219,841
<SALES> 247,051
<TOTAL-REVENUES> 247,051
<CGS> 111,568
<TOTAL-COSTS> 111,568
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,094
<INCOME-PRETAX> 84,303
<INCOME-TAX> 42,504
<INCOME-CONTINUING> 41,799
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,799
<EPS-BASIC> 0.31
<EPS-DILUTED> 0.30
</TABLE>
