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 September 30, 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 of the Company's common stock as of October 31, 2000 is shown below:
Number of Shares
Title of Class Outstanding
Common Stock, par value $0.10 per share 248,785,417
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Nine Months Ended
millions, except September 30 September 30
per share amounts 2000 1999 2000 1999
Revenues
Gas sales $503.7 $ 98.2 $ 758.4 $259.8
Oil and condensate sales 339.7 55.1 555.6 156.7
Natural gas liquids sales 84.5 26.4 164.6 58.6
Minerals and other 28.2 0.6 30.5 2.3
Total 956.1 180.3 1,509.1 477.4
Costs and Expenses
Operating expenses 119.8 35.2 208.6 103.7
Administrative and general 43.7 24.6 103.9 72.2
Depreciation, depletion and
amortization 215.6 51.7 334.8 162.2
Other taxes 52.2 9.7 76.8 27.4
Provision for doubtful 23.3 --- 23.3 ---
accounts
Impairments related to
international properties --- --- --- 20.0
Amortization of goodwill 11.3 --- 11.3 ---
Total 465.9 121.2 758.7 385.5
Operating Income 490.2 59.1 750.4 91.9
Other (Income) Expense
Merger expenses 63.7 --- 63.7 ---
Interest expense 27.9 17.9 69.5 55.0
Other (income) expense (29.0) 0.4 (29.3) (0.3)
Total 62.6 18.3 103.9 54.7
Income Before Income Taxes 427.6 40.8 646.5 37.2
Income Taxes 179.2 19.3 278.6 25.4
Net Income $248.4 $ 21.5 $ 367.9 $ 11.8
Preferred Stock Dividends 2.7 2.7 8.2 8.1
Net Income Available
to Common Stockholders $245.7 $ 18.8 $ 359.7 $ 3.7
Comprehensive Income - Net of Tax
Foreign currency translation
adjustments 1.8 --- 1.8 ---
Comprehensive Income $247.5 $ 18.8 $ 361.5 $ 3.7
Per Common Share
Net income - basic $ 1.07 $ 0.15 $ 2.22 $ 0.03
Net income - diluted $ 1.03 $ 0.15 $ 2.14 $ 0.03
Dividends $ 0.05 $ 0.05 $ 0.15 $ 0.15
Average Number of Common
Shares Outstanding 230.4 127.4 162.2 124.4
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See accompanying notes to consolidated financial statements.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
millions, except September 30, December 31,
share amounts 2000 1999
ASSETS
Current Assets
Cash and cash equivalents $ 129.2 $ 44.8
Accounts receivable, net of allowance 835.0 259.6
Inventories 98.3 46.1
Other current assets 41.2 5.4
Total 1,103.7 355.9
Properties and Equipment
Original cost 15,253.8 5,917.2
Less accumulated depreciation,
depletion and amortization 2,578.6 2,236.0
Net properties and equipment - based on
the full cost method of accounting
for oil and gas properties 12,675.2 3,681.2
Other Assets 285.4 61.3
Goodwill, net of amortization 1,027.3 ---
$15,091.6 $4,098.4
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See accompanying notes to consolidated financial statements.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED BALANCE SHEET (continued)
(Unaudited)
millions, except September 30, December 31,
share amounts 2000 1999
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable
Trade and other $ 832.3 $ 298.6
Banks 87.1 26.4
Accrued expenses
Interest 87.3 20.0
Taxes and other 164.1 42.2
Total 1,170.8 387.2
Long-term Debt 4,024.2 1,443.3
Other Long-term Liabilities
Deferred income taxes 3,261.3 576.8
Other 391.7 156.5
Total 3,653.0 733.3
Stockholders' Equity
Preferred stock, par value $1.00
(2,000,000 shares authorized, 200,000
shares issued as of September 30, 2000
and December 31, 1999) 200.0 200.0
Common stock, par value $0.10
(450,000,000 shares authorized,
251,060,146 and 129,620,333 shares
issued as of September 30, 2000 and
December 31, 1999, respectively) 25.1 13.0
Paid-in capital 5,170.3 633.9
Retained earnings (as of September 30,
2000, retained earnings were not
restricted as to the payment of
dividends) 1,097.9 763.5
Deferred compensation (46.7) (7.9)
Unearned employee stock ownership plan
(1,153,673 shares as of September 30, (72.8) ---
2000)
Executives and Directors Benefits Trust,
at market value (2,000,000 shares as of
September 30, 2000 and December 31, (132.0) (67.9)
1999)
Treasury stock (39 shares as of
September 30, 2000) --- ---
Accumulated other comprehensive income -
foreign currency translation 1.8 ---
adjustments
Total 6,243.6 1,534.6
$15,091.6 $4,098.4
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See accompanying notes to consolidated financial statements.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30
millions 2000 1999
Cash Flow from Operating Activities
Net income $367.9 $ 11.8
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation, depletion and amortization 335.7 163.4
Amortization of goodwill 11.3 ---
Non-cash merger expense 30.8 ---
Interest expense - zero coupon debentures 6.9 ---
Deferred income taxes 191.9 8.8
Provision for doubtful accounts 23.3 ---
Impairments of international properties --- 20.0
Other non-cash items (24.5) ---
943.3 204.0
Increase in accounts receivable (155.7) (30.3)
Increase in inventories (6.1) (2.0)
Decrease in accounts payable -
trade and other and accrued expenses (23.3) (39.5)
Other items - net 85.7 (6.2)
Net cash provided by operating activities 843.9 126.0
Cash Flow from Investing Activities
Additions to properties and equipment (976.5) (431.6)
Sales and retirements of properties
and equipment 42.6 102.5
Acquisition costs, net of cash acquired (55.4) ---
Proceeds from the sale of assets to be
leased, net --- 3.8
Net cash used in investing activities (989.3) (325.3)
Cash Flow from Financing Activities
Additions to debt 344.7 300.0
Retirements of debt (277.5) (320.1)
Issuance of common stock 176.7 260.7
Increase (decrease) in accounts payable, banks 19.3 (16.6)
Dividends paid (33.4) (26.9)
Net cash provided by financing activities 229.8 197.1
Net Increase (Decrease) in Cash and Cash
Equivalents 84.4 (2.2)
Cash and Cash Equivalents at Beginning of 44.8 17.0
Period
Cash and Cash Equivalents at End of Period $129.2 $ 14.8
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See accompanying notes to consolidated financial statements.
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 primarily in the exploration, development, production and marketing of natural gas, crude oil, condensate and natural gas liquids (NGLs). On July 14, 2000, Union Pacific Resources Group Inc. (UPR) merged with Anadarko Petroleum Corporation. See Note 2. The terms "Anadarko" and "Company" refer to Anadarko Petroleum Corporation and its subsidiaries. The principal subsidiaries of Anadarko are: UPR; Anadarko Algeria Corporation; Anadarko Canada Corporation; Anadarko Energy Services Company; and, Anadarko Gathering Company. Certain amounts have been reclassified to conform to the current presentation.
The portion of gathering revenues, processing revenues and the margin related to oil and gas marketing activities has been reported as a net addition to oil and gas revenues in the accompanying statement of income.
Goodwill Goodwill represents the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed in the merger with UPR and is being amortized on a straight-line basis over 20 years. The Company reviews goodwill to determine if there has been any impairment. Any impairment would be charged to expense in the period identified.
2. Merger Transaction On April 2, 2000, Anadarko and UPR entered into a Merger Agreement. On July 13, 2000, the stockholders of both companies approved the merger transaction. Each share of common stock of UPR issued and outstanding was converted into 0.455 shares of Anadarko common stock. The merger was treated as a tax-free reorganization and accounted for as a purchase business combination under generally accepted accounting principles. Under this method of accounting, the Company's historical operating results for periods prior to the merger are the same as Anadarko's historical operating results. At the date of the merger, the assets and liabilities of Anadarko remain based upon their historical costs, and the assets and liabilities of UPR are recorded at their estimated fair market values.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Merger Transaction (continued)
The following is a calculation of the purchase price:
millions, except per share amounts
Shares of common stock issued 114.1
Average of Anadarko stock price per share
around the merger announcement $ 35.58
Fair value of stock issued $4,060.1
Add: Fair value of vested UPR employee
stock options assumed by Anadarko,
less common stock issuance costs 99.6
4,159.7
Add: Capitalized merger costs 146.3
Purchase price $4,306.0
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Capitalized merger costs relate primarily to severance and relocation costs of UPR employees ($82 million), professional fees directly related to the merger ($43 million) and other direct transaction costs ($21 million). In addition, merger costs of $64 million were expensed in the third quarter of 2000 related to the UPR merger. These relate primarily to the issuance of stock for retention of employees ($45 million), deferred compensation ($8 million), transition, hiring and relocation costs ($6 million) and vesting of restricted stock and stock options ($5 million).
The following is the allocation of the purchase price to specific assets and liabilities based on estimates of fair values and costs, which will be adjusted to actual amounts as determined. Such adjustments are not expected to be material.
millions Current assets $ 657.0 Properties and equipment 8,395.0 Other assets 240.6 Goodwill 1,038.6 Current liabilities 928.0 Long-term debt 2,506.8 Deferred income taxes 2,468.4 Other long-term liabilities 268.3 Stockholders' equity $4,159.7 |
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Merger Transaction (continued)
In the third quarter of 2000, costs of $34.3 million, related to the closing of UPR's offices in Fort Worth, Texas, were included in capitalized merger costs. During the quarter, 181 employees actually separated and were paid pursuant to the severance plans and 151 employees were relocated from Fort Worth to Houston.
The remaining accrued liability balance included in capitalized merger costs is expected to be spent in 2000 and 2001. The following table summarizes the activity in the accrued liability account for the three and nine months ended September 30, 2000:
millions Capitalized merger costs $146.3 Cash payments (102.7) Non-cash payments (9.6) Ending balance $ 34.0 |
The pro forma results for 2000 and 1999 are a result of combining the three and nine months income statements of Anadarko with the three and nine months income statements of UPR adjusted for 1) certain costs that UPR had expensed under the successful efforts method of accounting that are capitalized under the full cost method of accounting; 2) depreciation, depletion and amortization expense of UPR calculated in accordance with the full cost method of accounting applied to the adjusted basis of the properties acquired using the purchase method of accounting; 3) decreases to interest expense for the capitalization of interest on significant investments in unevaluated properties and major development projects and partly offset by the revaluation of UPR debt under the purchase method of accounting, including the elimination of amortization of historical debt issuance costs; 4) issuance of Anadarko common stock and common stock equivalents pursuant to the merger agreement, and 5) the related income tax effects of these adjustments based on the applicable statutory tax rates. It should be noted that the pro forma results do not include any merger expenses.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
2. Merger Transaction (continued)
The following table presents the unaudited pro forma results of the Company as though the merger had occurred on January 1, 1999.
Three Months Ended Nine Months Ended
millions, except September 30 September 30
per share amounts 2000 1999 2000 1999
Revenues $1,007.7 $616.5 $2,617.9 $1,650.5
Net income available to
common stockholders $ 270.4 $111.2 $ 642.8 $ 198.4
Earnings per share - basic $ 1.10 $ 0.46 $ 2.64 $ 0.83
Earnings per share - diluted $ 1.06 $ 0.46 $ 2.58 $ 0.82
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3. 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:
September 30, December 31,
millions 2000 1999
Materials and supplies $49.7 $14.2
Oil, due from third-parties 37.7 24.6
Natural gas, stored in inventory 10.9 7.3
$98.3 $46.1
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4. Properties and Equipment Oil and gas properties include costs of $2,823.9 million and $323.0 million at September 30, 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.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
5. Long-term Debt As a result of the merger, the liabilities of UPR became liabilities of the Company. Accordingly, the financial statements of the Company include an aggregate of approximately $2.5 billion of outstanding UPR debt at the date of the merger. A summary of long-term debt follows:
September 30, December 31,
millions 2000 1999
Commercial Paper $ 140.8 $ 198.3
Notes Payable, Banks 103.0 145.0
Long-term Portion of Capital Lease 12.2 ---
8 1/4% Notes due 2001 100.0 100.0
6.8% Debentures due 2002 246.9 ---
6 3/4% Notes due 2003 100.0 100.0
5 7/8% Notes due 2003 100.0 100.0
6.5% Notes due 2005 191.3 ---
7.375% Debentures due 2006 247.1 ---
7% Notes due 2006 194.1 ---
6.75% Notes due 2008 150.4 ---
7.8% Debentures due 2008 149.7 ---
7.3% Notes due 2009 155.6 ---
7.05% Debentures due 2018 183.0 ---
Zero Coupon Convertible
Debentures due 2020 351.6 ---
7 1/4% Debentures due 2025 0.3 100.0
7.5% Debentures due 2026 188.2 ---
7% Debentures due 2027 100.0 100.0
6.625% Debentures due 2028 100.0 100.0
7.15% Debentures due 2028 333.5 ---
7.20% Debentures due 2029 300.0 300.0
7.95% Debentures due 2029 238.5 ---
7.73% Debentures due 2096 100.0 100.0
7 1/4% Debentures due 2096 100.0 100.0
7.5% Debentures due 2096 138.0 ---
$4,024.2 $1,443.3
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The commercial paper and notes payable to banks have been classified as long-term debt in accordance with Statement of Financial Accounting Standards (SFAS) No. 6, "Classification of Short-term Obligations Expected to be Refinanced", under the terms of Anadarko's Bank Credit Agreements.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
5. Long-term Debt (continued)
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. Holders have the right to require Anadarko to repurchase their Debentures 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 aggregate amount of commitments is $300 million and expires in April 2001. In October 2000, the Company amended the UPR Competitive Advance/Revolving Credit Agreement. The amendment reduced bank commitments to $450 million, provided a Company guarantee and shortened the maturity to October 2001. As of September 30, 2000, the Company had $103 million outstanding under various credit agreements.
6. Supplemental Information for Guarantee of Securities
In connection with the merger transaction, Anadarko has guaranteed all of the outstanding publicly held indebtedness of UPR and its subsidiary Anadarko Canada Corporation (ACC). In order to provide meaningful financial data relating to the guarantee, the following condensed consolidating financial information as of September 30, 2000 and for the three and nine months ended September 30, 2000, has been provided following the policies set forth below:
1) The Company accounts for investments in subsidiaries on the cost basis. Earnings of subsidiaries are therefore not reflected in the related investment accounts. Investments in subsidiaries are included in Other Assets.
2) Certain reclassifications were made to conform the financial information to the financial presentation on a consolidated basis. The principal adjusting entries eliminate investments in subsidiaries and intercompany transactions and balances.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Supplemental Information for Guarantee of Securities (continued)
<CAPTIONS>
SUPPLEMENTAL CONDENSED CONSOLIDATING INCOME STATEMENTS
Three Months Ended September 30, 2000
Other Consolidating Anadarko
millions Anadarko UPR ACC Subsidiaries Adjustments Consolidated
Revenues
Gas sales $203.7 $255.2 $ 58.5 $20.1 $(33.8) $503.7
Oil and condensate sales 56.5 162.7 51.0 69.5 --- 339.7
Natural gas liquids sales --- 39.0 3.3 42.2 --- 84.5
Minerals and other 0.5 27.3 --- 0.6 (0.2) 28.2
Total 260.7 484.2 112.8 132.4 (34.0) 956.1
Cost and Expenses
Operating expenses 19.8 41.0 26.8 66.2 (34.0) 119.8
Administrative and general 24.2 14.6 1.0 3.9 --- 43.7
Depreciation, depletion and
amortization 55.8 120.7 30.4 8.7 --- 215.6
Other taxes 14.5 36.2 0.5 1.0 --- 52.2
Provision for doubtful
accounts --- --- --- 23.3 --- 23.3
Amortization of goodwill 11.3 --- --- --- --- 11.3
Total 125.6 212.5 58.7 103.1 (34.0) 465.9
Operating Income 135.1 271.7 54.1 29.3 --- 490.2
Other (Income) Expense
Merger expenses 63.0 0.7 --- --- --- 63.7
Interest expense 20.6 1.1 5.1 1.1 --- 27.9
Other (income) expense (3.8) (43.5) 14.7 (0.2) 3.8 (29.0)
Total 79.8 (41.7) 19.8 0.9 3.8 62.6
Income Before Income Taxes 55.3 313.4 34.3 28.4 (3.8) 427.6
Income Taxes 26.1 130.2 (2.7) 24.6 1.0 179.2
Net Income $ 29.2 $183.2 $ 37.0 $ 3.8 $ (4.8) $248.4
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Supplemental Information for Guarantee of Securities (continued)
SUPPLEMENTAL CONDENSED CONSOLIDATING INCOME STATEMENT
Nine Months Ended September 30, 2000
Other Consolidating Anadarko
millions Anadarko UPR ACC Subsidiaries Adjustments Consolidated
Revenues
Gas sales $468.4 $255.2 $ 58.5 $ 70.9 $(94.6) $ 758.4
Oil and condensate sales 152.0 162.7 51.0 189.9 --- 555.6
Natural gas liquids sales 0.1 39.0 3.3 122.2 --- 164.6
Minerals and other 1.9 27.3 --- 1.9 (0.6) 30.5
Total 622.4 484.2 112.8 384.9 (95.2) 1,509.1
Cost and Expenses
Operating expenses 58.6 41.0 26.8 177.4 (95.2) 208.6
Administrative and general 74.5 14.6 1.0 13.8 --- 103.9
Depreciation, depletion and
amortization 159.7 120.7 30.4 24.0 --- 334.8
Other taxes 37.3 36.2 0.5 2.8 --- 76.8
Provision for doubtful
accounts --- --- --- 23.3 --- 23.3
Amortization of goodwill 11.3 --- --- --- --- 11.3
Total 341.4 212.5 58.7 241.3 (95.2) 758.7
Operating Income 281.0 271.7 54.1 143.6 --- 750.4
Other (Income) Expense
Merger expenses 63.0 0.7 --- --- --- 63.7
Interest expense 60.0 1.1 5.1 3.3 --- 69.5
Other (income) expense (53.1) (43.5) 14.7 (0.3) 52.9 (29.3)
Total 69.9 (41.7) 19.8 3.0 52.9 103.9
Income Before Income Taxes 211.1 313.4 34.3 140.6 (52.9) 646.5
Income Taxes 62.5 130.2 (2.7) 87.7 0.9 278.6
Net Income $148.6 $183.2 $ 37.0 $ 52.9 $(53.8) $ 367.9
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SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2000
Other Consolidating Anadarko
millions Anadarko UPR ACC Subsidiaries Adjustments Consolidated
Assets
Current Assets $ 26.3 $ 843.5 $ 21.0 $ 292.0 $ (79.1) $ 1,103.7
Net Properties and Equipment 3,454.1 6,896.7 1,510.0 814.4 --- 12,675.2
Other Assets 4,828.7 128.9 28.5 96.1 (4,796.8) 285.4
Goodwill 1,027.3 --- --- --- --- 1,027.3
$9,336.4 $7,869.1 $1,559.5 $1,202.5 $(4,875.9) $15,091.6
Liabilities and Stockholders'
Equity
Current Liabilities $ 199.3 $ 472.8 $ 195.6 $ 381.7 $ (78.6) $ 1,170.8
Long-term Debt 1,532.7 1,784.7 706.8 --- --- 4,024.2
Other Long-term Liabilities 643.7 2,250.3 552.6 205.6 0.8 3,653.0
Stockholders' Equity 6,960.7 3,361.3 104.5 615.2 (4,798.1) 6,243.6
$9,336.4 $7,869.1 $1,559.5 $1,202.5 $(4,875.9) $15,091.6
-13-
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Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
6. Supplemental Information for Guarantee of Securities (continued)
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
Other Anadarko
millions Anadarko UPR ACC Subsidiaries Consolidated
Cash Flow from Operating
Activities
Net income $ 94.8 $183.2 $37.0 $ 52.9 $367.9
Adjustments to reconcile net
income to net cash provided
by operating activities 271.2 190.4 24.7 89.1 575.4
366.0 373.6 61.7 142.0 943.3
Changes in assets and
Liabilities 13.5 (58.3) (13.1) (41.5) (99.4)
Net Cash Provided by Operating
Activities 379.5 315.3 48.6 100.5 843.9
Cash Flow Used in Investing
Activities (635.5) (184.5) (48.6) (120.7) (989.3)
Cash Flow from Financing
Activities 244.4 (14.6) --- --- 229.8
Net Increase (Decrease) in Cash
and Cash Equivalents (11.6) 116.2 --- (20.2) 84.4
Cash and Cash Equivalents at
Beginning of Period 18.0 --- --- 26.8 44.8
Cash and Cash Equivalents at
End of Period $ 6.4 $116.2 $ --- $ 6.6 $129.2
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7. Preferred Stock In each of the first, second and third quarters of 2000 and 1999, dividends of $13.65 per share (equivalent to $1.365 per Depositary Share) were paid to holders of preferred stock.
8. Common Stock Under the most restrictive provisions of the Company's credit agreements, which limit the payment of dividends, retained earnings were not restricted as to the payment of dividends at September 30, 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.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
8. Common Stock (continued)
The reconciliation between basic and diluted EPS is as follows:
Three Months Ended Three Months Ended
September 30, 2000 September 30, 1999
millions except Per Share Per Share
per share amounts Income Shares Amount Income Shares Amount
Basic EPS
Income available to
common stockholders $245.7 230.4 $1.07 $18.8 127.4 $0.15
Effect of convertible
debentures 1.9 8.0 -- --
Effect of dilutive
stock options -- 2.9 -- 0.9
Diluted EPS
Income available to
common stockholders plus
assumed conversion $247.6 241.3 $1.03 $18.8 128.3 $0.15
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<CAPTION
Nine Months Ended Nine Months Ended
September 30, 2000 September 30, 1999
millions except Per Share Per Share
per share amounts Income Shares Amount Income Shares Amount
Basic EPS
Income available to
common stockholders $359.7 162.2 $2.22 $ 3.7 124.4 $0.03
Effect of convertible
debentures 4.4 6.2 -- --
Effect of dilutive
stock options -- 1.9 -- 0.7
Diluted EPS
Income available to
common stockholders plus
assumed conversion $364.1 170.3 $2.14 $ 3.7 125.1 $0.03
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For the three and nine months ended September 30, 2000 and 1999, options for 0.7 million and 3.2 million, 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.
On July 13, 2000, the stockholders of Anadarko approved an increase in the authorized number of Anadarko common shares from 300 million to 450 million. On July 14, 2000, each share of common stock of UPR issued and outstanding was converted into 0.455 shares of Anadarko common stock with approximately 114.1 million shares issued to the stockholders of UPR.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
9. Statement of Cash Flows Supplemental Information The amounts of cash paid (received) for interest (net of amounts capitalized) and income taxes are as follows:
Nine Months Ended
September 30
millions 2000 1999
Interest $43.9 $55.1
Income taxes $36.6 $(0.2)
|
The merger was completed through the issuance of common stock, which was a non-cash transaction that was not reflected in the statement of cash flows. See Note 2. The $55.4 million of acquisition costs reflected in "Cash Flow from Investing Activities" in the consolidated statement of cash flows represents capitalized merger costs accrued in connection with the merger of $146.3 million, less the cash acquired on the date of the merger of $90.9 million.
10. Commitments and Contingencies UPR was a party to several long- term firm gas transportation agreements that supported the gas marketing program within the gathering, processing and marketing (GPM) business segment, which was sold to Duke Energy Field Services, Inc. (Duke). Most of the GPM business segment's firm long-term transportation contracts were transferred to Duke in the GPM disposition. As part of the GPM disposition, UPR and Duke agreed that UPR will keep Duke whole on certain transportation contracts (keep- whole agreement). UPR will pay Duke if transportation market values fall below the contract transportation rates, while Duke will pay UPR if the market value exceeds the contract transportation rates. Transportation contracts transferred to Duke in the GPM disposition and included in the keep-whole agreement with Duke relate to various pipelines. It is UPR's contention (disputed by Duke) that the keep- whole agreement has terminated. As of September 30, 2000, Other Long- term Liabilities included $90.8 million related to this agreement.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
11. Legal Proceedings
General The Company is a defendant in a number of lawsuits and is involved in governmental proceedings arising in the ordinary course of business, including, but not limited to, royalty claims, contract claims and environmental claims. The Company has also been named as a defendant in various personal injury claims, including numerous claims by employees of third-party contractors alleging exposure to asbestos and benzene while working at the Corpus Christi refinery, which the Company sold in segments in 1987 and 1989. While the ultimate outcome and impact on the Company cannot be predicted with certainty, management believes that the resolution of these proceedings will not have a material adverse effect on the consolidated financial position of the Company, although results of operations and cash flow could be significantly impacted in the reporting periods in which such matters are resolved. Discussed below are several specific proceedings.
Mineral Reservation Litigation In August 1994, the surface owners (McCormick, et al.) of portions of five sections of Colorado land that are subject to mineral reservations made by the Company's predecessor in title brought suit against the Company in State District Court, Weld County, Colorado, to quiet title to minerals, including oil (in some of the lands) and natural gas. On June 23, 1997, the State District Court granted the Company's Motion for Summary Judgment, holding as a matter of law that the mineral reservations at issue were unambiguous and included all valuable non-surface substances, including oil and gas. The Colorado Court of Appeals affirmed the decision of the State District Court in granting the Company's Motion for Summary Judgment on December 10, 1998 and then denied the surface owners' Motion for Rehearing. The surface owners then filed a Petition for Writ with the Colorado Supreme Court, which was granted in September 1999. Oral arguments were heard on June 13, 2000. A decision is expected by the end of the first quarter of 2001.
Royalty Litigation During September of 2000, the Company was named as a defendant in a case styled U.S. of America ex rel. Harold E. Wright v. AGIP Company, et al. (the "Gas Qui Tam case") filed in the U.S. District Court for the Eastern District of Texas, Lufkin Division. This lawsuit generally alleges that the Company and 118 other defendants improperly measured and otherwise undervalued natural gas in connection with a payment of royalties on production from federal and Indian lands. Recently the case has been transferred to the U.S. District Court, Multi-District Litigation Docket pending in Wyoming. Motions to dismiss will be filed by the Company and numerous other defendants before the end of the year.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
11. Legal Proceedings (continued)
Based on the Company's present understanding of the various governmental and False Claims Act proceedings described above, the Company believes that it has substantial defenses to these claims and intends to vigorously assert such defenses. However, if the Company is found to have violated the Civil False Claims Act, the Company could be subject to a variety of sanctions, including treble damages and substantial monetary fines.
A group of royalty owners purporting to represent UPR's gas royalty owners in Texas (Neinast, et al.) was granted class action certification in December 1999, by the 21st Judicial District Court of Washington County, Texas, in connection with a gas royalty underpayment case against the Company. This certification did not constitute a review by the Court of the merits of the claims being asserted. The royalty owners' pleadings did not specify the damages being claimed, although most recently a demand for damages in the amount of $100 million has been asserted. The Company is of the opinion that the amount of damages at risk are substantially less than the amount demanded by the class action counsel and the Company intends to vigorously assert its defenses. The Company is currently appealing the class certification order and hopes to have same overturned. A hearing on the merits of the appeal has now been scheduled for December 1, 2000.
A group of royalty owners in the State of Oklahoma surrounding the Beaver County Gathering System allege five separate claims against the defendants that included UPR. This matter styled Galen Bridenstine v. Kaiser Francis Oil Company, et al. (including UPR) has been certified as a class action and is currently scheduled for trial in February 2001. The plaintiffs contend that gathering, compression and dehydration fees deducted by the defendants from royalty payments were in violation of the Oklahoma Check Stub Statute and were improper. The damages asserted for this claim are approximately $40 million. In addition, four additional claims have been asserted by the class plaintiffs, including claims for gas mismeasurement, failure to pay royalties on a higher price contract and failure to pay royalties on condensate. The total actual damages sought are approximately $55 million. In addition, the plaintiffs seek punitive damages. The Company is working vigorously to assert its defenses in this matter and believes that the Company would be entitled to indemnity, if an adverse judgment was entered against the Company. The Company has asserted an indemnity claim against the company from which it purchased the assets that are at issue in this litigation.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
11. Legal Proceedings (continued)
A class action lawsuit entitled Gilbert H. Coulter, et al. v. Anadarko Petroleum Corporation has been certified in the 26th Judicial District Court, Stevens County, Kansas. In this action, the royalty owners contend that royalty was underpaid as a result of the deduction for certain post-production costs in the calculation of royalty. The Company believes that its method of calculating royalty was proper and that its gas was marketable in the condition produced, and thus plaintiffs' claims are without merit. This case was certified as a class action in August 2000.
Kansas Ad Valorem Tax
General - 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 Pan Energy 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.
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.
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 million (pretax) and, if the petition for adjustment is denied in its entirety by FERC with respect to PanEnergy refunds, interest in an amount of $33.4 million (pretax) as of September 30, 2000. The Company also seeks from PanEnergy the return of the $0.8 million (pretax) charged against income in 1993 and 1994. In October 2000, the U.S. Magistrate issued recommendations concerning motions for summary judgment previously filed by both parties. In
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
11. Legal Proceedings (continued)
essence, the Magistrate's recommendation finds that the Company should be responsible for refunds attributable to the time period following August 1, 1985 while Duke Energy (as the successor company to Anadarko Production Company) should be responsible for refunds attributable to the time period before August 1, 1985. Remaining in dispute is approximately $7-$8 million in refunds attributable to Pan Eastern Exploration Company for the pre-August 1, 1985 time frame. The dispute over Pan Eastern's refunds is currently set for trial on the January/February 2001 trial docket of the U.S. District Court in Houston, Texas.
Anadarko's net income for 1997 included a $1.8 million 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 currently unable 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.
12. New Accounting Principles
Accounting for Derivatives SFAS No. 133, "Accounting for Derivative Instruments and for Hedging Activities", as amended, provides guidance for accounting for derivative instruments and hedging activities. SFAS No. 133, as amended, is effective for fiscal years beginning after June 15, 2000. The Company is evaluating the impact of the provisions of SFAS No. 133 and believes it will not have a material effect on the Company's financial condition or results of operations.
Revenue Recognition The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements" in December 1999. SAB No. 101 summarizes the SEC staff's views in applying generally accepted accounting principles to selected revenue recognition issues. The SEC staff has issued a document to address significant implementation issues related to SAB No. 101. To the extent that SAB No. 101 ultimately changes Anadarko's revenue recognition practices, Anadarko will be required to adopt SAB No. 101 no later than the quarter beginning October 1, 2000, with any cumulative effect adjustment computed as of January 1, 2000.
Item 1. Financial Statements (continued)
ANADARKO PETROLEUM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Unaudited)
12. New Accounting Principles (continued)
Currently, Anadarko includes the margin related to oil and gas marketing activities as oil and gas revenues. SAB No. 101 requires that the purchases of oil and gas related to marketing, currently included in the margin, be reclassified to costs and expenses. The Company estimates that the effect, if SAB No. 101 had been adopted for the three and nine months ended September 30, 2000, would be an increase to revenues of $0.9 billion and $1.7 billion, respectively, offset by an increase to costs and expenses of $0.9 billion and $1.7 billion, respectively.
13. The information, as furnished herein, reflects all normal recurring adjustments that are, in the opinion of management, necessary to a fair statement of financial position as of September 30, 2000 and December 31, 1999, the results of operations for the three and nine months ended September 30, 2000 and 1999, and cash flows for the nine months ended September 30, 2000 and 1999.
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
Anadarko's net income available to common stockholders in the third
quarter of 2000 totaled $245.7 million ($1.07 per share - basic).
Anadarko attributes its performance to continued growth in production
volumes and to strong commodity prices. Anadarko's results include the
effect of its acquisition of Union Pacific Resources Group Inc. (UPR),
which closed July 14, 2000. Net income includes a charge of $63.7
million ($40.8 million after taxes) for a portion of the costs
associated with the UPR acquisition. Excluding this item, Anadarko's
net income for the third quarter of 2000 was $286.5 million, or $1.24
per share (basic), on revenues of $956.1 million. For the same period
in 1999, Anadarko's net income was $18.8 million, or $0.15 per share
(basic), on revenues of $180.3 million.
For the nine-month period ending September 30, 2000, Anadarko's net income available to common stockholders was $359.7 million, or $2.22 per share (basic), on $1.5 billion of revenues. Excluding the item discussed above, Anadarko's net income available to common stockholders for the first nine months of 2000 was $400.5 million, or $2.47 per share (basic). By comparison, for the first nine months of 1999, Anadarko had net income available to common stockholders of $3.7 million, or $0.03 per share (basic) on revenues of $477.4 million. The 1999 results included a non-cash charge of $20 million
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
before taxes ($12.8 million after taxes) related to the Company's exploration activity in Eritrea. Excluding the impairment, net income available to common stockholders for the first nine months of 1999 was $16.5 million, or $0.13 per share (basic).
Costs and expenses during the third quarter of 2000 were $465.9 million, an increase of 284% compared to $121.2 million for the third quarter of 1999. For the first nine months of 2000, costs and expenses totaled $758.7 million, an increase of 108% compared to $365.5 million, excluding the impairment, for the first nine months of 1999. The increase for both periods in 2000 is primarily due to higher depreciation, depletion and amortization expense, operating expenses and other taxes all related to the increase in production volumes associated with the acquisition, higher administrative and general expenses associated with the Company's expanded workforce, a provision for doubtful accounts of $23.3 million and amortization of goodwill related to the merger of $11.3 million.
Merger expenses of $64 million were expensed in the third quarter of 2000 related to the UPR merger. These relate primarily to the issuance of stock for retention of employees ($45 million), deferred compensation ($8 million), transition, hiring and relocation costs ($6 million) and vesting of restricted stock and stock options ($5 million).
Interest expense for the third quarter of 2000 increased 56% to $27.9 million compared to $17.9 million for the third quarter of 1999. For the first nine months of 2000, interest expense was $69.5 million, an increase of 26% compared to $55.0 million for the same period of 1999. The increases in interest expense in 2000 are primarily due to higher levels of long-term debt in 2000 compared to 1999 as a result of the UPR acquisition, partially offset by higher capitalized interest.
Volumes and Prices
During the third quarter of 2000, Anadarko produced approximately 39.8
million energy equivalent barrels, up 243% from the 11.6 million
barrels produced in the same period of 1999. During the first nine
months of 2000, Anadarko produced approximately 67.2 million energy
equivalent barrels, up 82% from the 36.8 million barrels produced in
the same period of 1999. The increased production comes as a result of
the acquisition of UPR, oil production growth in Algeria and gas
production growth in East Texas.
Natural Gas Natural gas production in the third quarter of 2000 averaged 1,498 million cubic feet (MMcf) per day, an increase of 229% over the 456 MMcf per day produced in the same period last year. Natural gas prices at the wellhead averaged $3.80 per thousand cubic feet (Mcf) during the third quarter of 2000, compared with an average of $2.40 per Mcf in the comparable quarter of 1999.
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 and nine months ended September 30, 2000 and 1999:
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
Natural gas
United States
Bcf 115.9 41.9 209.0 127.9
MMcf/d 1,260 456 763 468
Price per Mcf $4.01 $2.40 $3.49 $1.97
Canada
Bcf 21.4 --- 21.4 ---
MMcf/d 232 --- 78 ---
Price per Mcf $2.74 --- $2.74 ---
Other International
Bcf 0.5 --- 0.5 ---
MMcf/d 6 --- 2 ---
Price per Mcf $1.10 --- $1.10 ---
Total
Bcf 137.8 41.9 230.9 127.9
MMcf/d 1,498 456 843 468
Price per Mcf $3.80 $2.40 $3.42 $1.97
Crude oil and condensate
United States
MBbls 4,966 1,967 8,715 6,458
MBbls/d 54 21 32 24
Price per barrel $30.65 $18.62 $28.42 $14.16
Algeria
MBbls 2,321 818 6,544 4,108
MBbls/d 25 9 24 15
Price per barrel $31.09 $20.99 $29.18 $14.97
Canada
MBbls 2,015 --- 2,015 ---
MBbls/d 22 --- 7 ---
Price per barrel $25.34 --- $25.34 ---
Other International
MBbls 3,509 --- 3,509 ---
MBbls/d 38 --- 13 ---
Price per barrel $19.10 --- $19.10 ---
Total
MBbls 12,811 2,785 20,783 10,566
MBbls/d 139 30 76 39
Price per barrel $26.73 $19.32 $26.79 $14.47
Natural gas liquids
United States
MBbls 3,845 1,787 7,765 4,949
MBbls/d 42 19 28 18
Price per barrel $21.13 $14.76 $20.77 $11.84
Canada
MBbls 145 --- 145 ---
MBbls/d 2 --- 1 ---
Price per barrel $22.55 --- $22.55 ---
Total
MBbls 3,990 1,787 7,910 4,949
MBbls/d 43 19 29 18
Price per barrel $21.18 $14.76 $20.81 $11.84
Total Energy Equivalent
Barrels (MMEEBs) 39.8 11.6 67.2 36.8
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
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
In the first nine months of 2000, Anadarko's natural gas production averaged 843 MMcf per day, up 80% from the average of 468 MMcf per day produced a year earlier. The wellhead price for natural gas in the first nine months of 2000 averaged $3.42 per Mcf, compared with $1.97 per Mcf in the same period last year.
Crude Oil, Condensate and Natural Gas Liquids Total production of crude oil and condensate in the third quarter averaged 139,000 barrels per day, up 363% from 30,000 barrels per day in the third quarter of 1999. Oil prices in the third quarter of 2000 averaged $26.73 per barrel, compared with $19.32 per barrel in the same quarter last year.
Anadarko's production of crude oil and condensate for the first nine months of 2000 averaged 76,000 barrels per day, up 95% from the average of 39,000 barrels per day in the comparable 1999 period. Anadarko's average oil price for the 2000 period was $26.79 per barrel, compared with $14.47 per barrel in the same period last year.
Volumes of NGLs during the quarter averaged 43,000 barrels per day, up 126% from 19,000 barrels per day in the third quarter of 1999. Prices during the quarter for Anadarko's natural gas liquids (NGLs) averaged $21.18 per barrel, compared with the $14.76 per barrel average in the same quarter last year.
Anadarko's NGLs volumes during the first nine months of 2000 averaged 29,000 barrels per day, an increase of 61% over the 18,000 barrels per day produced in the same period in 1999. The average price per barrel for NGLs during the 2000 period was $20.81, compared with $11.84 a year earlier.
Capital Expenditures, Liquidity and Dividends
During the first nine months of 2000, Anadarko's capital spending (including capitalized interest and overhead) was $976.5 million compared to $431.6 million in the same period of 1999.
As a result of the merger, the liabilities of UPR became liabilities of the Company. Accordingly, the financial statements of the Company include an aggregate of approximately $2.5 billion of outstanding UPR debt assumed at the date of the merger.
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
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
at a fixed conversion rate. Holders have the right to require Anadarko to repurchase their Debentures 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 aggregate amount of commitments is $300 million and expires in April 2001. In October 2000, the Company amended the UPR Competitive Advance/Revolving Credit Agreement. This amendment reduced bank commitments to $450 million, provided a Company guarantee and shortened the maturity to October 2001.
Anadarko currently anticipates that the 2000 capital expenditures will be about $1.6 billion. This amounts to a $484 million or 43% increase over the combined total of Anadarko's previously announced 2000 capital budget of $766 million and the $350 million remaining from the 2000 capital budget of UPR. Anadarko's capital spending will focus on natural gas projects in East Texas and Louisiana, gas assets in western Canada, and gas and oil projects on the shelf, sub-salt and deep water properties in the Gulf of Mexico. Anadarko also will pursue selected high potential exploration projects in North America and internationally.
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 the remainder of 2000.
Exploration and Development Activities
During the third quarter of 2000, Anadarko participated in a total of 276 wells, including 91 oil wells, 163 gas wells and 22 dry holes. This compares to a total of 52 wells, including 11 oil wells, 34 gas wells and 7 dry holes during the third quarter of 1999.
For the first nine months of 2000, Anadarko participated in a total of 492 wells, including 170 oil wells, 292 gas wells and 30 dry holes. This compares to a total of 136 wells, including 35 oil wells, 77 gas wells and 24 dry holes during the first nine months of 1999. The increase in activity during 2000 was directly related to the increase in capital expenditures due to higher commodity prices. This increase in activity has led to higher production volumes. Following is a description of activity during the first nine months of 2000.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
Onshore - Lower 48 States
Bossier Sand Play
Development - The rig count in Anadarko's most active drilling area
increased by two during the third quarter, bringing the total number of
rigs operating in the Bossier Sand to 28 (24 in East Texas and four in
northwest Louisiana). During the first nine months of 2000, Anadarko
completed 105 wells in the Bossier. The Company now has 265 wells that
produced an average of 234 MMcf/d of gas (gross) and 178 MMcf/d of gas
(net) in the third quarter.
One completion during the third quarter was the Edwards A-4 well in the Dew/Mimms Creek Field, which tested 30.2 MMcf/d of gas from the Bonner Sand. Another well completed in the third quarter was the Thigpen A-2 well in the Dew/Mimms Creek Field of Freestone County, Texas. The well, which tested more than 17 MMcf/d of gas from the Moore and Bonner sands, steps out more than 1.5 miles from Anadarko's best producer in the play so far. The results from the third quarter also included the Adams A-2 well in the Dew Field, which tested 23.4 MMcf/d of gas.
During the third quarter, Anadarko increased its leasehold position, which now covers approximately 200,000 acres, 75% of which is undeveloped. At current activity levels, the Company has a two-year infill and development inventory.
The Company's gas gathering capabilities were enhanced during the third quarter with the August 1 start-up of operations at the Buffalo Central Gathering Facility (CGF). The Buffalo facility and the Goode Ranch CGF, which Anadarko began building in the third quarter, are designed for separation and dehydration of gas. Altogether, Anadarko's gas gathering network has more than 10,000 horsepower of compression - capable of processing 350 MMcf/d of gas - and more than 100 miles of pipeline.
Exploration - In the process of extending its Bossier discoveries, Anadarko continues to uncover new exploration opportunities. So far in 2000, the Company has drilled seven exploration wells, five of which are discoveries. The other two wells are currently being drilled. In fact, the Bossier Play actually consists of six separate fields and the Company is developing other pay zones in addition to the Bossier Sand formation.
South Louisiana During the third quarter, the fourth well was spud in the Kent Bayou Field of Terrebonne Parish, Louisiana, to further delineate the discovery. In addition, the Continental Land and Fur Co. No. 3 well was completed with estimated initial production of 6,000 barrels of oil per day (BOPD) and 22 MMcf/d of gas, following the
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
installation of processing equipment. Volumes from the two wells currently producing are 2,400 BOPD and 10 MMcf/d of gas. Anadarko is currently upgrading facilities by adding compression, separators and a new oil sales pipeline that should increase production significantly by the end of November 2000. Anadarko owns a 66.7% working interest in the Kent Bayou Field, which was discovered in 1999.
The Company's ongoing horizontal drilling program in the Austin Chalk resulted in two significant completions in south Louisiana during the third quarter. The Exxon Minerals A-1 RE well tested 480 BOPD and 2.5 MMcf/d of gas after re-entering the Chalk and being drilled laterally for a distance of 3,500 feet. Anadarko owns a 78% working interest in the well which is located in the Masters Creek Field in Rapides Parish, Louisiana. In Vernon Parish, Louisiana, the Company completed the Strickland 17 No. 1 RE, which was drilled using stacked horizontal laterals. The re-entry, which covered 3,500 feet in the Chalk A and 3,200 feet in the Chalk B, tested 644 BOPD and 2.1 MMcf/d of gas. Anadarko has a 100% working interest in the well, which is located in the Masters Creek Field.
Hugoton Embayment During the third quarter, Anadarko stepped up drilling programs in southwest Kansas. The goal is to offset declines in production from the older Hugoton Field with new production from deeper zones from the area. The Bush B-3 well in the Evalyn Field of Seward County, Kansas, was re-completed to the Marmaton "C" interval. The well is flowing 353 BOPD and 276 thousand cubic feet per day of gas through a 25/64-inch choke. In Stevens County, Kansas, Anadarko completed a well as a lower Morrow producer. The HJV Christopher A-1 well flowed 10.5 MMcf/d of gas and 45 barrels of condensate per day. The Company owns a 100% working interest in the well. Anadarko also re- completed the Adams L-3 well in the Eubank Field of Haskell County, Kansas, which tested 149 BOPD from the Morrow Lime formation. The Company has a 100% working interest in the well. Also in the Eubank Field, Anadarko completed a four-well deep drilling program resulting in combined gross production of 258 BOPD and 1.3 MMcf/d of gas from seven different intervals. In the Lorena East Field of Texas County, Oklahoma, Anadarko completed the Murphy Trust A-1 well. The well produced 300 BOPD from the Basal Chester formation. Anadarko owns a 64% working interest in the well.
Texas Panhandle Another five wells were completed in the West
Panhandle Field of Moore County, Texas, as the Company continued with
its infill drilling program targeting the shallow Red Cave formation.
Seven wells were placed on production during the third quarter at a
combined initial rate of 5.5 MMcf/d of gas (gross). So far in 2000,
Anadarko has drilled 29 successful Red Cave wells, which have added
8.0 MMcf/d of gas (gross) to the Company's production volumes.
Anadarko owns a 100% working interest in these 2,300-foot low-cost gas
wells.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
Permian Basin The Company's waterflood program in the Snyder Field
of Howard County, Texas, continued at a brisk pace during the third
quarter. Individual well results were highlighted by the B.S. TXL "D"
No. 3335, No. 3336 and No. 3320, which tested at a combined rate of
181 BOPD (gross) from the San Angelo/Clearfork formation. The Susie B.
Snyder No. 2012 well tested 59 BOPD (gross), while the Susie B. Snyder
"C" No. 2819 well produced 101 BOPD (gross). Both wells were completed
in the San Angelo formation. The Susie B. Snyder No. 2010 was
completed in the San Angelo/Clearfork formation and tested 144 BOPD
(gross). Anadarko has a 100% working interest in each of these wells.
Activity was strong in the Revilo Field of Scurry County, Texas,
during the third quarter, with four completions. The P.P. Boyles No.
16 well and the M.M. Boyd No. 8 tested at a combined rate of 149 BOPD
(gross). The Company has a 100% working interest in these
Wichita/Albany producers. The M.M. Boyd No. 7 produced 49 BOPD (gross)
after being completed in the San Angelo formation. The Iona Williamson
No. 10 well was completed in the Glorieta and Clearfork formations and
tested 57 BOPD (gross). The Company has a 100% working interest in
both of these wells.
A nine-well development drilling program in the North Shugart Field of Eddy County, New Mexico was concluded in the third quarter. As a result of the initiative, gross production from the Bone Spring formation increased to 959 BOPD and 1.5 MMcf/d of gas, up from 40 BOPD and 90 Mcf/d of gas prior to the program.
Two completions from the third quarter included the Paton "B" No. 3 Federal well which tested 62 BOPD (gross) from the Grayburg formation and the Baish Federal No. 11, that produced 90 BOPD (gross) from the Bone Spring formation. Anadarko owns a 100% working interest in each well.
In the Ozona Field, of Crockett County, Texas, activity continued at a steady pace highlighted by development drilling in the Canyon Sand and Strawn intervals. During the third quarter Anadarko completed 11 development wells which produced 2.5 MMcf/d of gas (gross). Year-to- date, 40 wells have been completed in the Ozona Field, adding 7 MMcf/d of gas (gross).
Rocky Mountains The 2000 coal-bed methane drilling program in Utah began in the third quarter. Using two rigs, the Company has drilled 31 successful wells, with another 22 wells planned for the fourth quarter. The majority of production from these wells initially will be water, with gas volumes ramping up through 2001.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
In the Helper Field of Carbon County, Utah - the focal point of Anadarko's coal-bed methane program - construction to expand the existing central production facility (CPF) was initiated and is expected to be completed in the fourth quarter of 2000. Currently processing 23 MMcf/d of gas (gross), the CPF is at full capacity. The expansion project will increase its capabilities to 33 MMcf/d of gas. Construction also began on a new CPF, an electrical distribution system and a pipeline network for the Clawson Spring Field in Carbon and Emery Counties, Utah. This project is also expected to be completed in the fourth quarter.
The pace of drilling in the greater Wamsutter area in Wyoming increased in the third quarter as a result of government approval of the Continental Divide/Wamsutter II Environmental Impact Study. A total of 49 wells have been drilled as part of a four-rig drilling program in the area, which will continue through 2000. Anadarko has an average 25% working interest in these wells. In addition, Anadarko expects to have two Company-operated rigs running during the fourth quarter that will be focused on development drilling. One will be dedicated to an infill project in the Wamsutter Field and the other to a drilling project in the Brady Field.
In the overthrust belt of western Wyoming, activity was highlighted by the completion of the Kewanee Federal 1A well. This horizontal re- entry in the Madison formation tested at rates as high as 52 MMcf/d of gas which will flow to the Whitney Canyon plant. Anadarko owns a 12.6% working interest in the well and a 19% working interest in the Whitney Canyon plant.
Golden Trend Anadarko launched a 19-well drilling program in the third quarter to develop oil reserves in the Northeast Purdy Springer Unit (NEPSU). The initiative will focus on CO2 flood infill drilling in the NEPSU. There were two active rigs in operation at the end of the third quarter, and the Company expects to have three rigs active in the fourth quarter.
Carthage During the third quarter, Anadarko completed 12 wells in the Carthage area of East Texas, which added 11 MMcf/d of gas (gross) to the Company's production volumes. Four rigs are currently operating in the play, developing tight gas sands in the Cotton Valley interval. The Sandbar prospect, an exploratory well targeting the deeper Bossier formation, was also spud in the third quarter.
Net volumes from the more than 900 wells currently producing in the four areas comprising the Carthage Field are about 100 MMcf/d of gas and about 5,000 barrels of oil and NGLs per day.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
Central Texas Continued development of the Buda and Austin Chalk formations is the primary focus of Anadarko's efforts in central Texas. Using six rigs, the Company completed 16 wells in the third quarter, which added incremental production of 38.1 MMcf/d of gas and 6,100 BOPD. Particularly noteworthy was the Becker No. 1 RE well in the Navasota River Field of Washington County, Texas which is producing 22.3 MMcf/d of gas. Anadarko has a 100% working interest in the well. Current net volumes from Anadarko's nearly 1,200 producing wells in central Texas are 190 MMcf/d of gas and 13,935 BOPD.
Re-entering producing intervals through the use of horizontal drilling is a major component of Anadarko's Austin Chalk program. A total of 11 workover rigs were also in operation during the third quarter, conducting fracture stimulation operations that increased the Company's production volumes.
Offshore - Gulf of Mexico
Anadarko was the apparent high bidder on 17 of 18 blocks on which the Company bid in the Federal OCS Lease Sale No. 177 conducted by the Minerals Management Service on August 23, 2000. Six of the blocks are in the Mustang Island area offshore Texas, where water depths run as shallow as 250 feet. The rest are deepwater blocks located in the East Breaks and Garden Banks areas in water depths up to 4,000 feet. Three of the blocks surround Anadarko's LaSalle deepwater prospect, which is expected to be drilled in December 2000 or January 2001. The Company invested $4.7 million to acquire the lease acreage and holds a 100% working interest in 15 of the blocks and a 50% working interest in the other two blocks. To date, Anadarko has officially been awarded 15 of the 17 blocks for which it was the apparent high bidder.
Sub-salt Installation of the production facilities to develop the Tanzanite (Eugene Island 346) and Hickory (Grand Isle 110/111/116) Fields 80 miles off the coast of Louisiana was completed during the third quarter. Both procedures were completed during a three-week period in late August and early September. The Tanzanite platform, located in 314 feet of water, is designed with six drilling slots and will have the capacity to produce 200 MMcf/d of gas and 15,000 BOPD. The Hickory platform, located in 320 feet of water, will be capable of producing 300 MMcf/d of gas and 15,000 BOPD through eight drilling slots. Anadarko has a 100% working interest in Tanzanite and has a 50% working interest in Hickory. Initial production from both fields is expected during the fourth quarter of 2000.
In the Hickory Field during the third quarter, Anadarko also spudded the Grand Isle 111 well No. 1, which is testing a separate fault block adjacent to the original discovery well (Grand Isle 116 No. 1). Also known as the North Hickory prospect, the well is currently being sidetracked to the top of the Hickory structural closure.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
At the Mahogany production platform (Ship Shoal 349/359), Anadarko spudded the A-9 exploratory well during the third quarter. The well is targeting natural gas in the deeper "T" sand interval below the main "P" sand pay zone which produces oil. At the end of October the A-9 well was drilling at 11,364 feet.
Deepwater A third sidetrack well to the Green Canyon 608 No. 1 well was drilled during the third quarter, as delineation of the Marco Polo discovery continued. Drilling is also underway on the Green Canyon 608 No. 2 well, which is designed to test for additional pay intervals in a separate fault block. The Company owns a 100% working interest in the Marco Polo prospect. Elsewhere in the deepwater, the Company spudded the Mississippi Canyon 711 No. 5 well as part of an effort to determine the extent of the Gomez discovery.
Conventional At the Matagorda Island 622/623 complex, the largest gas field offshore Texas, the operator completed the D-3 well during the third quarter as part of an ongoing program to increase natural gas volumes. The well was brought on-line at a rate of 35 MMcf/d of gas. In addition, production from the C-8 well, which began drilling in the second quarter, commenced in the third quarter. A procedure to install larger 5-1/2 inch tubing during the third quarter also helped accelerate production. Gross volumes from the field at the end of the third quarter were more than 200 MMcf/d of gas. The Company has a 37.5% working interest in the complex.
The South Marsh Island Block 269 No. 7 STDK #1 well was drilled during the third quarter and encountered 60 feet of pay. Completion efforts are currently underway with initial production expected to be 25 MMcf/d of gas (gross). Anadarko owns a 55% working interest in the well and serves as operator.
During the third quarter, the second well was spud at Ship Shoal Block
296. The well encountered two pay sands totaling 60 feet after being
drilled to a depth of 10,345 feet. The No. 2 well is awaiting the
fabrication and installation of production facilities. Flow rates are
estimated at 25-40 MMcf/d of gas. The No. 1 well, which was spud during
the second quarter, logged 75 feet of pay. Anadarko owns a 35% working
interest in the field.
In the third quarter, Anadarko had a discovery at Ship Shoal Block 207. The A-35 well encountered more than 100 feet of net gas pay in four zones. Production is expected to commence in November 2000 at an initial rate of 15 MMcf/d of gas. Anadarko serves as operator of the well and has a 53% working interest.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
Alaska
Development facilities at the Alpine Field on the North Slope are nearly complete, with first production on schedule to begin later in the fourth quarter of 2000. Anadarko expects volumes to average 80,000 BOPD (gross) in 2001.
During the third quarter, Anadarko sold a 33.33% working interest in its North Slope acreage held under exclusive lease option to AEC Oil & Gas (USA) Inc., a wholly owned subsidiary of Alberta Energy Company Limited. The lease covers 3.1 million acres under option from the Arctic Slope Regional Corporation in the Foothills region south of Prudhoe Bay. Anadarko is operator, with a 66.67% working interest. The transaction complements Anadarko's purchase of MacKenzie Delta Basin acreage in Canada's Northwest Territories (see below for details).
International
Canada In August 2000, Anadarko purchased a 37.5% working interest in two exploration licenses covering 530,000 acres in the MacKenzie Delta region from Alberta Energy Company Ltd. (AEC) of Calgary. Increasing Canadian holdings in the MacKenzie Delta fits Anadarko's long-term strategy of providing natural gas to North American markets. The transaction involves two onshore blocks adjacent to the gas-rich Parsons Lake Field. The purchase complements Anadarko's MacKenzie Delta/Beaufort Sea holdings, which consist of non-operated working interests that range from 3% to 24% in 11 significant discovery licenses and one production license. Combined, the properties cover more than 142,000 gross acres and include the Amauligak Field, the largest offshore field in the Canadian portion of the Beaufort Sea.
In another development, Anadarko submitted a successful bid for an
exploration license on one of the MacKenzie Delta/Beaufort Sea tracts
offered in the August 14, 2000 lease sale by the Minister of Indian
Affairs and Northern Development. The Company acquired a 100% working
interest in Exploration License No. 407, which is centrally located in
a region where 53 fields with reserves of 9 trillion cubic feet of gas
and 1 billion barrels of oil have already been discovered (source:
National Energy Board). Exploration License 407 covers about 176,000
acres and is immediately northwest of the giant Taglu Field.
During the first nine months of 2000, 254 wells were completed in the shallow gas Hatton play of southwest Saskatchewan, adding production of 16 MMcf/d of gas (net). The Hatton Field is currently producing 72.8 MMcf/d of gas (net) with the Company's working interest in these wells averaging about 85%. Anadarko has a two-year inventory of 610 shallow gas wells.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
Combined production from the various heavy oil programs underway in Eastern Alberta is currently about 16,000 BOPD. In the Kehewin/Moose Hills areas, the primary area of focus, 112 wells have been drilled year to date with cumulative incremental production of more than 700,000 barrels or nearly 2,700 BOPD. Using 2-D seismic data, Anadarko has located new productive channels on 50,000 acres acquired last year, with additional drilling planned for this year. A 130 square-mile 3-D seismic acquisition program is planned for later in the 2000-2001 winter season. Overall, Anadarko projects more than 1,000 drilling locations in its inventory for this very economic play.
Production at the Klua Field in British Columbia has been expanded by
10 MMcf/d of gas, with volumes currently running at 28 MMcf/d of gas
(gross). Another 50 drilling locations have been identified in various
plays throughout British Columbia where Anadarko will have nine rigs
active during the 2000-2001 winter season.
Algeria During the third quarter, Anadarko and partners awarded the Engineering Procurement and Construction (EPC) contract to build a central production facility to develop the Ourhoud Field. The new facilities, which are being built by a joint venture group composed of JGC Corporation of Japan and Initec of Spain, will have a capacity of 230,000 BOPD (gross) when completed. First production is expected in late 2002. The EPC contract calls for the construction of three oil processing units, along with water injection and gas processing and injection facilities, a field gathering system and crude oil storage and shipping installations.
In addition, the Company and its partners signed an addendum to the EPC contract with Brown and Root Condor for development of the satellite fields (HBNSE, RBK, QBN and BKNE) adjacent to the Hassi Berkine South (HBNS) Field. The contract includes construction of a third production train under Anadarko's Stage II development program that will increase gross plant capacity by an additional 75,000 BOPD in the second half of 2002.
Highlights from Anadarko's drilling program in the third quarter included a number of significant wells. The HBN-5 well, located in the southern portion of the Hassi Berkine (HBN) Field, encountered 38 feet of net pay in the TAGI reservoir and was completed as an oil producer. The well tested 4,623 BOPD and 4.1 MMcf/d of gas. The HBN-6 well, located in the northern area of the HBN Field, was completed as an oil producer in September. The well encountered nearly 72 feet of net pay in the main TAGI reservoir. The QB-12 well in the north central portion of the Ourhoud Field encountered 112 feet of net pay and was suspended as a planned oil producer.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
Latin America In Venezuela, during the third quarter, three successful wells were drilled in the Oritupano Leona Field. The Orm- 144, Orm-145 and Orm-146 wells are being completed in the Oficina formation. Anadarko has a 45% working interest in this field. Third quarter drilling activity brings the number of wells drilled to date in 2000 to 22 wells of a planned 28 wells for the year. Daily production has increased to 45,000 BOPD (gross) (20,000 BOPD net to Anadarko), up from 40,000 BOPD (gross) (18,000 BOPD net) at the beginning of the year.
In Guatemala, an 11,500 foot exploration well is presently drilling on La Sabana No. 1. Anadarko operates all of its activities in Guatemala with a 100% interest.
West Africa In the third quarter, Anadarko entered into a farmout agreement for three exploration blocks off the coast of West Africa. Anadarko will serve as operator and holds a 50% interest in the Agali Block offshore Gabon and will also operate the Marine IX Block offshore the Republic of Congo with a 37.5% interest. On the Keta Block in Ghana, a shelf-edge exploration well is expected to be drilled later this year in which Anadarko has a 50% interest. A deepwater 3-D seismic survey is planned for the Agali Block early in 2001 to evaluate prospective areas identified on a recent 2-D survey. A deepwater exploration well is planned for the Marine IX Block in 2001.
North Atlantic Margin Anadarko acquired two blocks in the most recent licensing round in the Faroe Islands and is currently evaluating its options which could include exploratory drilling to chase the play northward.
New Accounting Principles
Accounting for Derivatives Statement of Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and for Hedging Activities", as amended, provides guidance for accounting for derivative instruments and hedging activities. SFAS No. 133, as amended, is effective for fiscal years beginning after June 15, 2000. The Company is evaluating the impact of the provisions of SFAS No. 133 and believes it will not have a material effect on the Company's financial condition or results of operations.
Revenue Recognition The Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements" in December 1999. SAB No. 101 summarizes the SEC staff's views in applying generally accepted accounting principles to selected revenue recognition issues. The SEC staff has issued a
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)
document to address significant implementation issues related to SAB No. 101. To the extent that SAB No. 101 ultimately changes Anadarko's revenue recognition practices, Anadarko will be required to adopt SAB No. 101 no later than the quarter beginning October 1, 2000, with any cumulative effect adjustment computed as of January 1, 2000.
Currently, Anadarko includes the margin related to oil and gas marketing activities as oil and gas revenues. SAB No. 101 requires that the purchases of oil and gas related to marketing, currently included in the margin, be reclassified to costs and expenses. The Company estimates that the effect, if SAB No. 101 had been adopted for the three and nine months ended September 30, 2000, would be an increase to revenues of $0.9 billion and $1.7 billion, respectively, offset by an increase to costs and expenses of $0.9 billion and $1.7 billion, respectively.
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.
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. 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 prices may have on the cash flows from the Company's derivative commodity instruments. Based on 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 September 30, 2000 and December 31, 1999 does not have a material adverse effect on the financial position or results of operations of the Company.
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 September 30, 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 September 30, 2000 and December 31, 1999 does not have a material effect on the financial position or results of operations of the Company.
Foreign Currency Risk At September 30, 2000, the Company's Canadian subsidiary had $650 million outstanding of fixed-rate notes and debentures denominated in U.S. dollars. For the third quarter and nine month period of 2000, the Company recognized an $11 million pretax non- cash loss associated with the remeasurement of this debt. The potential foreign currency remeasurement impact on earnings from a 5% change in the September 30, 2000 Canadian exchange rate would be about $37 million.
The Company periodically enters into foreign currency contracts to hedge specific currency exposures from commercial transactions. The following table summarizes the Company's open foreign currency positions at September 30, 2000:
Maturity Year
millions, except rates 2000 2004 Total
Notional amount $ 18.0 $ 70.0 $88.0
Forward rate 1.4719 1.3629
Market rate 1.5051 1.4714
Decrease in rate (0.0332) (0.1085)
Fair value - gain (loss) $ (0.6) $ (7.6) $(8.2)
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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 11 of the Notes to Consolidated Financial Statements under
Part I. Financial Information of this Form 10-Q.
Item 4. Submissions of Matters to a Vote of Security Holders
On July 13, 2000, in a special meeting held in Houston, Texas, the stockholders of Anadarko approved the merger transaction with Union Pacific Resources Group, Inc. and other related matters. Following are the voting results:
(a) Approval of the issuance of Anadarko common shares pursuant to the proposed merger.
106,804,068 votes for, 197,990 votes against, 133,433 shares abstained and 7,872,462 shares not voted.
(b) Approval of the Amendment to the Restated Certificate of Incorporation to increase the maximum size of the Board of Directors from nine to 15 directors.
114,305,164 votes for, 562,268 votes against and 140,521 shares abstained.
(c) Approval of the Amendment to the Restated Certificate of Incorporation to increase the authorized number of Anadarko common shares from 300,000,000 to 450,000,000.
113,838,085 votes for, 1,021,147 votes against and 148,721 shares abstained.
(d) Approval of the Amendment to the 1999 Stock Incentive Plan.
92,492,810 votes for, 14,369,547 votes against, 279,814 shares abstained and 7,865,782 shares not voted.
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.
Exhibit Original Filed File
Number Description Exhibit Number
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) Certificate of Amendment of 4.1 to Form 8-K dated 1-8968
Anadarko's Restated July 28, 2000
Certificate of Incorporation
* (e) By-laws of Anadarko
Petroleum Corporation,
as amended
4(a) 364-Day Credit Agreement, 4(a) to Form 10-Q 1-8968
Dated as of April 14, 2000 for quarter ended
March 31, 2000
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Item 6. Exhibits and Reports on Form 8-K (continued)
Exhibit Original Filed File
Number Description Exhibit Number
*4(b) Amended and Restated
Competitive Advance/
Revolving Credit Agreement,
Dated as of October 25, 2000
*10(a) Employment Agreement
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* (b) First Amendment to Andadarko Petroleum Corporation Key Employee Change of Control Contract
*12 Computation of Ratios of
Earnings to Fixed Charges
and Earnings to Combined
Fixed Charges and Preferred
Stock Dividends
*27 Financial Data Schedule
(b) Reports on Form 8-K
A report on Form 8-K dated July 28, 2000 was filed in which the earliest event reported was July 14, 2000. This event was reported under Item 2, "Acquisition or Disposition of Assets", Item 5, "Other Events", and Item 7 "Financial Statements, Pro Forma Financial Information and Exhibits".
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)
November 10, 2000 By: [MICHAEL E. ROSE] Michael E. Rose - Executive Vice President, Finance and Chief Financial Officer
EXHIBIT 3(e)
(Sec. 3.3 deleted 4/25/96
Sec. 3.1 amended 7/31/00)
BY-LAWS
OF
ANADARKO PETROLEUM CORPORATION
ARTICLE I
OFFICE AND RECORDS
1.1. The Corporation shall maintain a registered office in Delaware, and may maintain such other offices and keep its books, documents and records at such places within or without Delaware as may from time to time be designated by the Board of Directors.
ARTICLE II
MEETINGS OF STOCKHOLDERS
2.1. All meetings of the stockholders of the Corporation shall be held at such place or places, within or without the State of Delaware, as may from time to time be fixed by the Board of Directors, or as shall be specified or fixed in the respective notices or waivers of notice thereof.
2.2. The Annual Meeting of Stockholders shall be held on such date and at such time as may be fixed by the Board and stated in the notice thereof, for the purpose of electing directors and for the transaction of only such other business as is properly brought before the meeting in accordance with these By-Laws.
To be properly brought before the meeting, business must be either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board, (b) otherwise properly brought before the meeting by or at the direction of the Board, or (c) otherwise properly brought before the meeting by a stockholder. In addition to any other applicable requirements, for business to be properly brought before the Annual Meeting by a stockholder, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a stockholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not less than 50 days nor more than 75 days prior to the meeting; provided, however, that in the event that less than 65 days' prior public disclosure of the date of the meeting is made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 15th day following the day on which such public disclosure was made or notice of the date of the meeting was mailed, whichever first occurs. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the Annual Meeting (i) a brief description of the business desired to be brought before the Annual Meeting and the reasons for conducting such business at the Annual Meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the stockholder and (iv) any material interest of the stockholder in such business.
Notwithstanding anything in these By-Laws to the contrary, no business shall be transacted at the Annual Meeting except in accordance with the procedures set forth in this Section, provided, however, that nothing in this Section shall be deemed to preclude discussion by any stockholder of any business properly brought before the Annual Meeting.
The Chairman of the Annual Meeting shall, if the facts warrant, determine and declare to the meeting that certain business was not properly brought before the meeting in accordance with the provisions of this Section, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted.
2.3. Special meetings of the stockholders shall be called by the Board. The business transacted at a special meeting shall be confined to the purposes specified in the notice thereof. Special meetings shall be held at such date and at such time as the Board may designate.
2.4. Written notice of each meeting of stockholders, stating the place, date and hour of the meeting, and the purpose or purposes thereof, shall be mailed not less than ten nor more than sixty days before the date of such meeting to each stockholder entitled to vote thereat.
2.5. Unless otherwise provided by statute, stockholders entitled to cast a majority of the total votes entitled to be cast by all stockholders at a meeting, present either in person or by proxy, shall constitute a quorum at such meeting. The Secretary of the Corporation (or in his absence an Assistant Secretary or an appointee of the presiding officer of the meeting) shall act as the Secretary of the meeting. Whether or not a quorum is present, holders of shares of stock entitled to cast a majority of votes present at a meeting, in person or by proxy, may adjourn the meeting from time to time to another time or place, at which time, if a quorum is present, any business may be transacted which might have been transacted at the meeting as originally scheduled. Notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken, unless the adjournment is for more than thirty days or a new record date is fixed for the adjourned meeting, in which event a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
2.6. Each stockholder entitled to vote at any meeting shall be entitled, for each share held of record on the record date fixed as provided in Section 10.3 of Article X of these By-Laws for determining the stockholders entitled to vote at such meeting, to a number of votes (in person or by written proxy) determined as provided in the Restated Certificate of Incorporation. Except as otherwise provided by statute or by the Restated Certificate of Incorporation or these By-laws, the vote of a plurality of the votes cast shall be sufficient to elect directors and to pass any resolution within the power of the holders of all the outstanding shares.
Elections of directors need not be by ballot; provided however, that by resolution duly adopted, a vote by ballot may be required.
2.7. Any stockholder entitled to vote upon any matter at any meeting of stockholders may so vote by proxy. Every proxy shall be in writing (which shall include telegraphing or cabling) subscribed by the stockholder or his duly authorized attorney, and shall be dated, but need not be sealed, witnessed or acknowledged. Proxies shall be delivered to the Secretary of the Corporation before such meeting.
2.8. At each meeting of the stockholders the polls shall be opened and closed, the proxies and ballots shall be received and be taken in charge, and all questions touching the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by three inspectors, two of whom shall have power to make a decision. Such inspectors shall be appointed by the Board before the meeting, or in default thereof by the presiding officer at the meeting, and shall be sworn to the faithful performance of their duties. If any of the inspectors previously appointed shall fail to attend or refuse or be unable to serve, substitutes shall be appointed by the presiding officer.
ARTICLE III
BOARD OF DIRECTORS
3.1. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors consisting of not less than six (6) nor more than fifteen (15) directors, the exact number of directors to be determined from time to time by resolution adopted by affirmative vote of a majority of the entire Board of Directors. The directors shall be divided into three classes, designated Class I, Class II and Class III. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the Board of Directors. At a special meeting of stockholders held August 27, 1986, Class I directors were elected for a term ending at the 1987 Annual Meeting of Stockholders, Class II directors were elected for a term ending at the 1988 Annual Meeting of Stockholders, and Class III directors were elected for a term ending at the 1989 Annual Meeting of Stockholders, in each case effective as of the date of filing of the Restated Certificate of Incorporation with the Secretary of State of the State of Delaware. At each Annual Meeting of Stockholders beginning in 1987, successors to the class of directors whose term expires at that Annual Meeting shall be elected for a three-year term. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director. A director shall hold office until the Annual Meeting for the year in which his term expires and until his successor shall be elected and shall qualify, subject, however, to prior death, resignation, retirement, disqualification or removal from office. Any vacancy on the Board of Directors that results from an increase in the number of directors may be filled by a majority of the Board of Directors then in office, provided that a quorum is present, and any other vacancy occurring in the Board of Directors may be filled by a majority of the directors then in office, even if less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the number of directors shall have the same remaining term as that of his predecessor.
Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause.
3.2. The Board of Directors may exercise all such powers of the Corporation and do all such lawful acts and things as are not by the laws of Delaware, by the Restated Certificate of Incorporation or by these By-Laws directed or required to be exercised or done by the stockholders.
ARTICLE IV
MEETINGS OF THE BOARD
4.1. The first meeting of the Board of Directors after the Annual Meeting of Stockholders may be held without notice, either immediately after said meeting of stockholders and at the place where it was held, or at such other time and place, whether within or without Delaware, as shall be fixed by the vote of the stockholders at the Annual Meeting, or by the consent in writing of all the directors.
4.2. Regular meetings of the Board may be held without notice at such time and place, whether within or without Delaware, as shall from time to time be determined by the Board.
4.3. Special meetings of the Board of Directors shall be called by the Secretary at the request in writing of the Chief Executive Officer or of any three directors. Such request shall state the purpose or purposes of the proposed meeting. Such meetings may be held at any place, whether within or without Delaware. Notice of each such meeting shall be given by the Secretary to each director at least three days before the meeting. Such notice shall set forth the time and place at which the meeting is to be held and the purpose or purposes thereof. No such notice of any given meeting need be given to any director who files a written waiver of notice thereof with the Secretary, either before or after the meeting.
4.4. A quorum for the transaction of business at meetings of the Board of Directors shall consist of a majority of the directors then in office, but in no event less than one-third of the whole Board. In the absence of a quorum at any duly scheduled or duly called meeting, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present, at which time any business may be transacted which might have been transacted at the meeting as originally scheduled.
ARTICLE V
COMMITTEES OF THE BOARD
5.1. General.
(a) The Board of Directors may, by resolution passed by a majority vote of the full membership of the Board, designate one or more committees, each committee to consist of two or more directors. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Any such committee shall have and may exercise such powers as are designated in the resolution of the Board or set forth in these By-Laws.
(b) Unless he resigns, dies or is removed prior thereto, each member of a committee shall continue to hold office until the first meeting of the Board following the first Annual Meeting of Stockholders next following his designation, and until his successor has been designated. Resignations of members of a committee must be in writing and shall be effective upon the date of receipt thereof by the Secretary or upon the effective date specified therein, whichever date is later, unless acceptance is made a condition of the resignation, in which event it shall be effective upon acceptance by the Board. Any member of a committee may be removed at any time, with or without cause, by a majority vote of the full membership of the Board.
(c) Regular meetings of a committee may be held without notice at such time and place as shall from time to time be determined by the committee. Special meetings of a committee shall be called by the Secretary at the request of the Chief Executive Officer or of any two members of the committee. Notice of each special meeting of a committee shall be given by the Secretary to each member of the committee. No such notice of any meeting need be given to any member of a committee who attends the meeting or who files a written waiver of notice thereof with the Secretary, either before or after the meeting.
(d) Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board, a provision in the rules of such committee or a provision in the By-Laws to the contrary, a majority of the entire number of members of such committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee. If the Board has not designated alternate members of a committee, or if all such alternates are absent or disqualified from voting, the member or members of the committee present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may in the absence or disqualification of any member of the committee unanimously appoint another member of the Board of Directors to act at the meeting in the place of such absent or disqualified member.
(e) Each committee may designate a chairman of such committee by majority vote of the committee's full membership, unless designation of a chairman is otherwise specified in these By-Laws or provided by resolution of the Board of Directors.
5.2. Executive Committee.
(a) The Board of Directors may designate an Executive Committee. During the intervals between meetings of the Board, the Committee shall advise with and aid the officers of the Corporation in all matters concerning its interests and the management of its business, and generally perform such duties as may be directed by the Board of Directors from time to time. The Committee shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation while the Board is not in session, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but the Committee shall not have power or authority in reference to amending the Restated Certificate of Incorporation, adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, amending the By-Laws, filling newly created directorships and vacancies on the Board or the Committee, or (unless expressly authorized by resolution of the Board) declaring a dividend or authorizing the issuance of stock.
(b) A quorum for the transaction of business at meetings of the Executive Committee shall consist of a majority of the members of the Committee then in office.
(c) The Executive Committee shall keep regular minutes of proceedings, copies of which shall be sent to each member of the Board of Directors.
ARTICLE VI
COMPENSATION OF DIRECTORS
6.1. Each director and each advisory director shall, in consideration of his serving as a director or advisory director, be paid by the Corporation such reasonable compensation as shall be fixed from time to time by resolution of the Board of Directors, together with traveling, food, lodging and other expenses incurred in attending meetings of the Board; provided that no director or advisory director who is also an employee of the Corporation shall be entitled to receive any compensation for his services as a director or advisory director.
6.2. Members of committees of the Board of Directors may receive such reasonable compensation for their services as may be fixed from time to time by resolution of the Board of Directors; provided that nothing herein contained shall be construed to preclude any member of any committee from serving the Corporation in any other capacity and receiving compensation therefor.
ARTICLE VII
OFFICERS
7.1. General.
(a) The officers of the Corporation shall be chosen by the Board of Directors. The principal officers shall be a Chairman of the Board, a Vice Chairman of the Board (if chosen by the Board), a President, one or more Vice Presidents (one or more of whom may be designated Executive Vice President, one or more of whom may be designated Group Vice President and one or more of whom may be designated Senior Vice President), a Secretary, a Treasurer, a Controller, and a General Counsel (if chosen by the Board). The principal officers shall be elected each year at the first meeting of the Board of Directors after the Annual Meeting of the Stockholders of the Corporation. Two or more offices may be held by the same person. The Chairman of the Board, the Vice Chairman of the Board and the President shall be chosen by the directors from their own number. The salaries of the principal officers of the Corporation shall be fixed by the Board.
(b) The Board may appoint such other officers, assistant officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined by the Board. The salaries of persons appointed under this section may be fixed by the Chief Executive Officer, who shall report to the Board annually thereon.
(c) Unless he resigns, dies or is removed prior thereto, each officer of the Corporation shall hold office until his successor has been chosen and has qualified. Any person elected or appointed by the Board of Directors may be removed at any time, with or without cause, and all vacancies (however arising) may be filled at any time, by the affirmative vote of a majority of the directors then in office. Any other employee of the Corporation may be removed at any time, with or without cause, by the Chief Executive Officer or by any superior of such employee to whom the power of removal has been delegated by the Chief Executive Officer.
7.2. Chief Executive Officer.
(a) The Board of Directors shall designate either the Chairman of the Board or the President to be the Chief Executive Officer of the Corporation.
(b) All other officers of the Corporation shall be subordinate to the Chief Executive Officer and shall from time to time report to him as he may direct. He shall have general supervision and direction of the business of the Corporation and shall see that all orders and resolutions of the Board are carried into effect.
(c) He shall have all the general powers and duties usually vested in the chief executive officer of a corporation, and in addition shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors.
7.3. Chairman of the Board.
(a) The Chairman of the Board shall preside at all meetings of the stockholders and directors.
(b) He shall be a member and chairman of the Executive Committee and he shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors.
(c) He shall, if designated Chief Executive Officer, have all the powers and duties granted and delegated to the Chief Executive Officer by the By-Laws. If not designated Chief Executive Officer, he shall be vested with all the powers and authorized to perform all the duties of the Chief Executive Officer in his absence or disability.
7.4. Vice Chairman of the Board.
(a) If the Board chooses a Vice Chairman of the Board, he shall preside at meetings of the stockholders or directors in the absence or disability of the Chairman of the Board.
(b) He shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.5. President.
(a) He shall be a member of the Executive Committee and he shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors.
(b) He shall, if designated Chief Executive Officer, have all the power and duties granted and delegated to the Chief Executive Officer by these By-Laws. If not designated Chief Executive Officer, he shall be vested with all the powers and authorized to perform all the duties of the Chief Executive Officer in his absence or disability.
7.6. Executive Vice President.
If the Board designates one or more Executive Vice Presidents, such officer or officers shall have such powers and perform such duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer and shall be vested with all the powers and authorized to perform all the duties of the Chairman of the Board, the Vice Chairman of the Board and the President in the absence or disability of all of said officers. Each Executive Vice President shall have all the powers and duties granted and delegated to each Group Vice President, Senior Vice President and Vice President by these By- Laws.
7.7. Group Vice President.
If the Board designates one or more Group Vice Presidents, such officer or officers shall have general direction of and supervision over such operating offices of the Corporation or over such departments of the Corporation and its subsidiaries as the Board of Directors or the Chief Executive Officer may prescribe. Each Group Vice President shall have all the powers and duties granted and delegated to each Vice President (other than the Executive Vice Presidents) by these By-Laws and shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer. In the absence or disability of the Chairman of the Board, the Vice Chairman of the Board, the President and the Executive Vice Presidents, each Group Vice President shall be vested with all the powers and authorized to perform all the duties of said officers.
7.8. General Counsel.
If the Board designates a General Counsel, the General Counsel shall be the principal legal officer of the Corporation. He shall have general direction of and supervision over the legal affairs of the Corporation and shall advise the Board of Directors and officers of the Corporation on all legal matters. He shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.9. Senior Vice President.
If the Board designates one or more Senior Vice Presidents, such officer or officers shall have such powers and perform such duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer. In the absence or disability of the Chairman of the Board, the Vice Chairman of the Board, the President, the Executive Vice Presidents and the Group Vice Presidents, each Senior Vice President shall be vested with all the powers and authorized to perform all the duties of said officers.
7.10. Vice President.
Each Vice President shall have such powers and perform such duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer. In the absence or disability of the Chairman of the Board, the Vice Chairman of the Board, the President, the Executive Vice Presidents, the Group Vice Presidents and the Senior Vice Presidents, each Vice President shall be vested with all the powers and authorized to perform all the duties of said officers.
7.11. Secretary.
The Secretary shall attend all sessions of the Board and all meetings of the stockholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose. He shall perform like duties for committees of the Board when required. He shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors, when notice is required by these By-Laws. He shall have custody of the seal of the Corporation, and, when authorized by the Board of Directors, or when any instrument requiring the corporate seal to be affixed shall first have been signed by the Chairman of the Board, the Vice Chairman of the Board, the President or any Vice President, shall affix the seal to such instrument and shall attest the same by his signature. He shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.12. Assistant Secretary.
If the Board appoints one or more Assistant Secretaries, each Assistant Secretary shall be vested with all the powers and authorized to perform all the duties of the Secretary in his absence or disability. The performance of any act or the execution of any instrument by an Assistant Secretary in any instance in which such performance or execution would customarily have been accomplished by the Secretary shall constitute conclusive evidence of the absence or disability of the Secretary. Each Assistant Secretary shall perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.13. Treasurer.
(a) The Treasurer shall have custody of the corporate funds and securities, and he shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation, in such depositories as may be designated by the Board of Directors.
(b) He shall disburse the funds of the Corporation as ordered by the Board, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of Directors, at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial condition of the Corporation.
(c) If required by the Board of Directors, he shall give the Corporation a bond in a sum and with one or more sureties satisfactory to the Board, for the faithful performance of the duties of his office, and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, money and other property of whatever kind in his possession or under his control belonging to the Corporation.
(d) He shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.14. Assistant Treasurer.
If the Board appoints one or more Assistant Treasurers, each Assistant Treasurer shall be vested with all the powers and authorized to perform all the duties of the Treasurer in his absence or disability. The performance of any act or the execution of any instrument by an Assistant Treasurer in any instance in which such performance or execution would customarily have been accomplished by the Treasurer shall constitute conclusive evidence of the absence or disability of the Treasurer. Each Assistant Treasurer shall perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.15. Controller.
The Controller shall be the principal accounting officer of the Corporation. He shall maintain adequate records of all assets, liabilities and transactions of the Corporation and shall be responsible for the design, installation and maintenance of accounting and cost systems and procedures throughout the Corporation. He shall have such other powers and perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.16. Assistant Controller.
If the Board appoints one or more Assistant Controllers, each Assistant Controller shall be vested with all the powers and authorized to perform all duties of the Controller in his absence or disability. The performance of any act or the execution of any instrument by an Assistant Controller in any instance in which such performance or execution would customarily have been accomplished by the Controller shall constitute conclusive evidence of the absence or disability of the Controller. Each Assistant Controller shall perform such other duties as may be prescribed from time to time by the Board of Directors or the Chief Executive Officer.
7.17. Duties of Officers May be Delegated.
In case of the absence of any officer of the Corporation, or for any other reason that the Board may deem sufficient, the Board may delegate, for the time being, the powers or duties, or any of them, of such officer to any other officer, or to any director, provided a majority of the directors then in office concur therein.
ARTICLE VIII
POWERS OF EXECUTION
8.1. All checks and other demands for money and notes and other instruments for the payment of money shall be signed on behalf of the Corporation by such officer or officers or by such other person or persons as the Board of Directors may from time to time designate. The signature of any such officer or other person may be a facsimile if so authorized by the Board of Directors.
8.2. All contracts, deeds and other instruments to which the seal of the Corporation is affixed shall be signed on behalf of the Corporation by the Chairman of the Board, by the Vice Chairman of the Board, by the President, by any Vice President, or by such other person or persons as the Board of Directors may from time to time designate, and shall be attested by the Secretary or an Assistant Secretary.
8.3. All other contracts, deeds and instruments shall be signed on behalf of the Corporation by the Chairman of the Board, by the Vice Chairman of the Board, by the President, by any Vice President, or by such other person or persons as the Board of Directors or the Chief Executive Officer may from time to time designate.
8.4. All shares of stock owned by the Corporation in other corporations shall be voted on behalf of the Corporation by such persons and in such manner as shall be prescribed by the Chief Executive Officer.
ARTICLE IX
INDEMNIFICATION
9.1 (a) The Corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether criminal, civil, administrative or investigative, including actions, suits or proceedings by or in the right of the Corporation, by reason of the fact that such person is or was a director, advisory director, officer or employee of the Corporation, or is or was serving at the request of the Corporation as a director, advisory director, officer or employee of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against judgments, fines (including excise taxes assessed with respect to employee benefit plans), amounts paid in settlement, reasonable expenses (including attorneys' fees) and other liabilities arising in connection with such action, suit or proceeding, and reasonable expenses (including attorneys' fees) incurred in enforcing the rights provided by this Section 9.1., to the fullest extent to which indemnity may lawfully be provided pursuant to a by-law under applicable law. Expenses incurred in defending a civil or criminal action, suit or proceeding shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, and interest on any such expenses not paid by the Corporation when due shall be paid by the Corporation at the rate announced from time to time by Manufacturers Hanover Trust Company as its reference rate, to the fullest extent to which advancement of such expenses and payment of such interest may lawfully be provided pursuant to a by-law under applicable law; provided, however, that, unless otherwise authorized by the Board of Directors, no person shall be entitled to such advance payment of expenses with respect to any action, suit or proceeding not by or in the right of the Corporation, unless such person shall have given the Corporation reasonable notice of the institution of such action, suit or proceeding and the opportunity to control the defense thereof (with counsel reasonably satisfactory to such person).
(b) The rights provided by this Section 9.1 are for the benefit of the persons referred to herein and their respective heirs, executors and administrators and shall be legally enforceable against the Corporation by such persons (who shall be presumed to have relied on such rights in undertaking or continuing any of the positions referred to herein) or by their respective heirs, executors and administrators. No amendment to or restatement of this Section 9.1, or merger or consolidation of the Corporation, shall impair the rights of indemnification provided by this Section 9.1 with respect to any action or failure to act, or alleged action or failure to act, occurring or alleged to have occurred prior to such amendment, restatement, merger or consolidation.
ARTICLE X
MISCELLANEOUS
10.1. Certificates of Stock.
The certificates of stock of the Corporation shall be numbered and shall be entered in the books of the Corporation as they are issued. They shall exhibit the holder's name and number of shares and shall be signed by (i) the Chairman of the Board, or Vice Chairman of the Board, or President or a Vice President and (ii) the Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary.
10.2. Transfers of Stock.
Transfers of stock shall be made on the books of the Corporation only by the person named in the certificate or by his attorney, lawfully constituted in writing, and upon surrender of the certificate therefor.
10.3. Date for Determining Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting nor more than sixty days prior to any other action.
10.4. Registered Stockholders.
The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof, and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share on the part of any other person, whether or not it shall have express or other notice thereof, save as expressly provided by the laws of Delaware.
10.5. Lost Certificates.
Any person claiming a certificate of stock to be lost, stolen or destroyed shall make an affidavit or affirmation of that fact, and shall if the Board of Directors so requires give the Corporation a bond of indemnity, in form and amount and with one or more sureties satisfactory to the Board, whereupon a new certificate may be issued of the same tenor and for the same number of shares as the one alleged to be lost, stolen or destroyed. The Board of Directors in its discretion may, as a prerequisite to the issuance of a new certificate, impose such additional lawful requirements as its sees fit, including, but without limiting the generality of the foregoing, the requirement that the alleged loss, theft or destruction of the old certificate be advertised in one or more newspapers published in an appropriate place or places; and the Board of Directors may in its discretion refuse to issue a new certificate except upon the order of a court having jurisdiction in such matter.
10.6. Dividends.
(a) Dividends upon the capital stock of the Corporation may be declared by the Board of Directors at any regular or special meeting as provided by the laws of Delaware and the Restated Certificate of Incorporation.
(b) Before payment of any dividend or making any distribution of profits, there may be set aside out of the surplus or net profits of the Corporation such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purposes as the directors shall think conducive to the interests of the Corporation.
10.7. Seal.
The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words, "Corporate Seal, Delaware."
10.8. Notices.
Whenever, under the provisions of these By-Laws, notice is required to be given to any director, officer or stockholder, it shall be construed to mean personal notice, but such notice may be given in writing, by mail, by depositing the same in the United States mail in a postpaid sealed wrapper, addressed to such director, officer or stockholder at such address as appears on the records of the Corporation, or, in the default of other address, to such director, officer or stockholder at the General Post Office in any city in which the Corporation maintains an office, and such notice shall be deemed to be given at the time when the same shall be thus mailed.
10.9. Amendments.
Except as otherwise provided by law, these By-Laws or the Restated Certificate of Incorporation, these By-Laws may be altered, amended or repealed (i) at any regular or special meeting of the stockholders by the affirmative vote of the holders of a majority of the stock issued and outstanding and entitled to vote thereat or (ii) at any regular or special meeting of the Board of Directors by affirmative vote of a majority of the directors then in office; provided, however, that notice of the proposed alteration or amendment shall have been contained in the notice of the meeting.
10.10. Fiscal Year.
The fiscal year of the Corporation shall be the calendar year.
10.11. Safe Deposit Boxes.
The Corporation may rent such safe deposit boxes, and may
deposit therein such securities, documents and articles, as the
Board of Directors may designate from time to time. Access to
such safe deposit boxes shall be granted only (i) to any two of
the following officers of the corporation attending together:
Chairman of the Board, Vice Chairman of the Board, President, a
Vice President, Secretary, Treasurer and Controller, or (ii) to
any one of the foregoing officers and either an Assistant
Secretary or an Assistant Treasurer, attending together.
10.12. Custodian Accounts.
Any or all of the securities owned by this Corporation may be deposited with such custodian or custodians as the Board of Directors may designate from time to time. The custodian shall not be authorized to negotiate such securities or to take any other action with respect thereto except upon written directions signed (i) by any two of the following officers of the Corporation: Chairman of the Board, Vice Chairman of the Board, President, a Vice President, Secretary, Treasurer and Controller, or (ii) by any one of the foregoing officers and either an Assistant Secretary or an Assistant Treasurer.
10.13. Construction of Words.
The use of the masculine gender in any provisions of these By-Laws shall not be deemed to indicate any distinction based on sex, but shall be deemed to include the feminine gender wherever it is found.
EXHIBIT 4(b)
EXECUTION ORIGINAL
Amended and Restated
Competitive Advance/Revolving Credit Agreement
Among
Union Pacific Resources Group Inc.,
as Borrower
Anadarko Canada Corporation,
as a Canadian Borrower
Anadarko Petroleum Corporation,
as Guarantor
The Chase Manhattan Bank,
as Administrative Agent
and
The Chase Manhattan Bank of Canada
as Canadian Sub-Agent
and
The Banks Named Herein,
as Banks
Dated as of October 25, 2000
Chase Securities Inc.,
as Arranger
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1
Section 1.01. Certain Defined Terms 1
Section 1.02. Computation of Time Periods 18
Section 1.03. Accounting Terms 18
Section 1.04. Number and Gender of Words 18
Section 1.05. Exchange Rates and Assigned Dollar Values 18
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES 19
Section 2.01. The Commitments 19
Section 2.02. Making the Contract Advances 20
Section 2.03. The Competitive Advances 21
Section 2.04. Conversion and Continuation of Contract
Borrowings 25
Section 2.05. Fees 27
Section 2.06. Reduction or Termination of the Commitments 27
Section 2.07. Repayment of Advances; Prepayment 28
Section 2.08. Interest 29
Section 2.09. Alternate Rate of Interest 30
Section 2.10. Increased Costs; Increased Capital 30
Section 2.11. Additional Interest on Eurodollar Rate Advances32
Section 2.12. Change in Legality 32
Section 2.13. Payments and Computations 32
Section 2.14. Taxes on Payments 34
Section 2.15. Sharing of Payments, Etc. 36
Section 2.16. Removal of a Bank 37
Section 2.17. Canadian Borrowers; Canadian Commitments 37
Section 2.18. Canadian Banker's Acceptances 38
ARTICLE III CONDITIONS OF LENDING 38
Section 3.01. Conditions Precedent to Closing 38
Section 3.02. Conditions Precedent to Each Borrowing 41
Section 3.03. Conditions Precedent to Canadian Borrowings 42
ARTICLE IV REPRESENTATIONS AND WARRANTIES 42
Section 4.01. Representations and Warranties by the Company42
Section 4.02. Representations and Warranties by the Guarantor43
ARTICLE V COVENANTS 44
ARTICLE VI EVENTS OF DEFAULT 46
ARTICLE VII THE ADMINISTRATIVE AGENT 48
Section 7.01. Authorization and Action 48
Section 7.02. Administrative Agent's Reliance, Etc. 49
Section 7.03. Administrative Agent and Affiliates 49
Section 7.04. Bank Credit Decision 49
Section 7.05. Indemnification 50
Section 7.06. Successor Administrative Agent 50
Section 7.07. Canadian Sub-Agent 51
ARTICLE VIII MISCELLANEOUS 51
Section 8.01. Amendments, Etc 51
Section 8.02. Notices, Etc. 52
Section 8.03. No Waiver; Remedies 52
Section 8.04. Costs, Expenses and Taxes 52
Section 8.05. Intentionally Omitted. 53
Section 8.06. Binding Effect and Assignment 53
Section 8.08. Governing Law 54
Section 8.09. Exceptions to Covenants 55
Section 8.10. Survival 55
Section 8.11. Invalid Provisions 55
Section 8.12. Maximum Rate 55
Section 8.13. Execution in Counterparts 55
Section 8.14. Not in Control 56
Section 8.15. Indemnification 56
Section 8.16. Entirety 57
Section 8.17. Waiver of Jury Trial 57
Section 8.18. Conversion of Currencies 58
Section 8.19. Interest Act (Canada) 58
Section 8.20. Termination of Guarantee Agreement 58
ARTICLE IX ANADARKO GUARANTY 59
Section 9.01. The Anadarko Guaranty 59
Section 9.02. Subrogation 60
Annex I Banker's Acceptance
Exhibit A-1 Form of Notice of Contract Borrowing
Exhibit A-2 Form of Notice of Competitive Borrowing
Exhibit A-3 Form of Notice of Competitive Bid Request
Exhibit A-4 Form of Competitive Bid
Exhibit A-5 Form of Competitive Bid Acceptance/Reject
Letter
Exhibit B Form of Assignment and Acceptance Agreement
Exhibit C Form of Opinion of Company's Counsel
Exhibit D Form of Notice of Drawing
Exhibit E Form of Discount Note
Schedule I Banks, Lending Offices and Commitments
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This AMENDED AND RESTATED COMPETITIVE ADVANCE/REVOLVING CREDIT AGREEMENT is entered into as of October 25, 2000, among UNION PACIFIC RESOURCES GROUP INC., a corporation organized under the laws of the State of Utah (the "Company"), ANADARKO CANADA CORPORATION, a corporation organized under the laws of the Province of Alberta, Canada ("ACC"), ANADARKO PETROLEUM CORPORATION, a corporation organized under the laws of the State of Delaware (the "Guarantor"), the Banks (as hereinafter defined), THE CHASE MANHATTAN BANK, as the Administrative Agent (as hereinafter defined) and THE CHASE MANHATTAN BANK OF CANADA, as the Canadian Sub-Agent (as hereinafter defined).
R E C I T A L S:
A. The Company, the Banks, the Administrative Agent and the Canadian Sub-Agent are parties to that certain Five-Year Competitive Advance/Revolving Credit Agreement dated as of October 27, 1998, as amended pursuant to Amendment No. 1 dated as of October 22, 1999 (said agreement as so amended the "Original Credit Agreement").
B. Subject to the terms and conditions of this Agreement, the Company, the Banks, the Administrative Agent and the Canadian Sub-Agent have agreed to amend and restate the Original Credit Agreement to, among other things, reduce the Commitments of the Banks, provide a guarantee by the Guarantor of the Obligations of the Company, and to amend the Maturity Date and the Termination Date (as such terms are defined in the Original Credit Agreement).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, the Company, ACC, as the only Canadian Borrower under the Original Credit Agreement, the Guarantor, the Banks, the Administrative Agent and the Canadian Sub-Agent hereby agree as follows:
ARTICLE IDEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms . As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):
"ACC" has the meaning specified in the Introduction to this Agreement.
"Acceptance" means a Draft denominated in Canadian Dollars drawn by any Canadian Borrower on a Canadian Bank and includes a depository bill within the meaning of the Depository Bills and Notes Act (Canada), as provided therein, in each case conforming to the requirements of this Agreement and accepted by such Canadian Bank in accordance with this Agreement. As the context shall require, "Acceptance" also has the meaning assigned to it in paragraph (j) of Annex I.
"Acceptance Borrowing" means a group of Acceptances in respect of Drafts that are drawn by the same Canadian Borrower and accepted by the Canadian Banks on the same date and have the same maturity date.
"Acceptance Equivalent Loan" means an advance made under this Agreement in Canadian Dollars by a Canadian Bank to a Canadian Borrower evidenced by a Discount Note.
"Acceptance Fee" has the meaning assigned to it in
Section 2.05(c).
"Acceptance Obligation" means with respect to each Acceptance, the obligation of the applicable Canadian Borrower to pay to the Canadian Bank that accepted such Acceptance the face amount thereof as required by this Agreement and the terms of such Acceptance.
"Administrative Agent" means The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.) and its permitted successor or successors as administrative agent for the Banks under this Agreement, and, in respect of Canadian Advances, means the Canadian Sub-Agent.
"Advance" means any US Advance or Canadian Advance.
"Affiliate" of a Person means any other individual or entity who directly or indirectly controls, is controlled by, or is under common control with that Person. For purposes of such definition, "control," "controlled by," and "under common control with" mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person (whether through ownership of voting securities or other interests, by contract or otherwise).
"Agreement" means this Amended and Restated Competitive Advance/Revolving Credit Agreement, as further amended, modified and supplemented from time to time, including, without limitation, any such supplement in respect of Competitive Advances under Section 2.03.
"Anadarko Guaranty" means the guaranty of the Guarantor contained in Article IX.
"Applicable BA Discount Rate" means, with respect to an Acceptance (a) being purchased by any Canadian Schedule I Bank on any day, the percentage discount rate equal to the CDOR Rate on such day (expressed to two decimal places and rounded upward, if necessary, to the nearest 1/100th of 1%) for bankers' acceptances in an amount and having a maturity date comparable to the amount and maturity date of such Acceptance, and (b) being purchased by any Canadian Schedule II Bank on any day, the lesser of (i) the arithmetic average of the percentage discount rates (expressed to two decimal places and rounded upward, if necessary, to the nearest 1/100th of 1%) quoted by the Canadian Schedule II Reference Banks as that at which the Canadian Schedule II Reference Banks would, in accordance with normal practice, at or about 10:00 a.m. (Toronto, Ontario time), on such day, be prepared to purchase bankers' acceptances in an amount and having a maturity date comparable to the amount and maturity date of such Acceptance and (ii) the percentage discount rate calculated pursuant to clause (a) above, plus .08% per annum.
"Applicable Canadian Pension Legislation" means, at any time, the Income Tax Act (Canada), the Pension Benefits Standards Act, 1985 (Canada), the Employment Pension Plans Act (Alberta) and any other pension legislation then applicable to any Canadian Borrower, including all regulations made thereunder, and all rules, regulations, rulings and interpretations made or issued by any governmental authority having or asserting jurisdiction in respect thereof.
"Applicable Lending Office" means, with respect to each Bank, such Bank's Domestic Lending Office in the case of an Alternate Base Rate Advance, such Bank's Canadian Lending Office in the case of a Canadian Advance, such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Contract Advance and, in the case of a Competitive Advance, the office or affiliate of such Bank notified by such Bank to the Company and the Administrative Agent as such Bank's Applicable Lending Office with respect to such Competitive Advance.
"Applicable Margin" means, on any date of determination of the interest rate for any Eurodollar Rate Contract Borrowing or of any Facility Fees or Acceptance Fees, the applicable percentage set forth in the table below for Eurodollar Rate Contract Borrowings or Facility Fees or Acceptance Fees, as appropriate, which corresponds to the ratings (or implied ratings) established by both S&P and Moody's applicable to the Guarantor's senior, unsecured, non-credit-enhanced long-term indebtedness for borrowed money ("Index Debt") on such date of determination; provided that at any time when (i) the Canadian Exposure hereunder exceeds (ii) 50% of the Maximum Canadian Allocation Amount, the Applicable Margin for Acceptance Fees shall be increased by 0.125%:
Ratings Applicable Applicable Drawn
Margin for Margin for Cost
Eurodollar Facility
Rate Fees
Contract
Borrowings
and
Acceptance
Fees
Category 1 Greater than or equal to A-/A3 0.37% 0.08% 0.45%
Category 2 BBB+/Baa1 0.40% 0.10% 0.50%
Category 3 BBB/Baa2 0.50% 0.125% 0.625%
Category 4 BBB-/Baa3 0.50% 0.15% 0.65%
Category 5 Less than BBB-/Baa3 0.70% 0.25% 0.95%
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For purposes of the foregoing, (a) if neither Moody's nor S&P
shall have in effect a rating for Index Debt (other than by
reason of the circumstances referred to in the last sentence of
this definition), then both such rating agencies will be deemed
to have established ratings for Index Debt in Category 5; (b) if
only one of Moody's or S&P shall have in effect a rating for
Index Debt, the Guarantor and the Banks will negotiate in good
faith to agree upon another rating agency to be substituted by an
amendment to this Agreement for the rating agency which shall not
have a rating in effect, and in the absence of such amendment the
Applicable Margin will be determined by reference to the
available rating; (c) if the ratings established by Moody's and
S&P shall fall within different Categories, the Applicable Margin
shall be determined by reference to the numerically lower
Category (for example, if the rating from S&P is in Category 1
and the rating from Moody's is in Category 2, the Applicable
Margin shall be determined by reference to Category 1); and
(d) if any rating established by Moody's or S&P shall be changed
(other than as a result of a change in the rating system of
either Moody's or S&P), such change shall be effective as of the
date on which such change is first announced by the rating agency
making such change. Each change in the Applicable Margin shall
apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective
date of the next such change. If the rating system of either
Moody's or S&P shall change, the Guarantor and the Banks shall
negotiate in good faith to amend the references to specific
ratings in this definition to reflect such changed rating system.
If both Moody's and S&P shall cease to be in the business of
rating corporate debt obligations, the Guarantor and the Banks
shall negotiate in good faith to agree upon a substitute rating
agency and to amend the references to specific ratings in this
definition to reflect the ratings used by such substitute rating
agency.
"Applicable Rate" means:
(a) with respect to Alternate Base Rate Advances, the Alternate Base Rate;
(b) with respect to Eurodollar Rate Contract Advances, the Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Contract Borrowings; and
(c) with respect to Canadian Prime Rate Contract Advances, the Canadian Prime Rate.
"Assessment Rate" means for any date of determination, the annual rate (rounded upwards, if necessary, to the next 1/100 of 1%) most recently estimated by the Administrative Agent as the then current net annual assessment rate that will be employed in determining amounts payable by the Administrative Agent to the Federal Deposit Insurance Corporation (or any successor) for insurance by such Corporation (or such successor) of time deposits made in US Dollars at the Administrative Agent's domestic offices.
"Assigned Dollar Value" means, with respect to any Canadian Borrowing at any time, (a) in the case of Canadian Borrowings denominated in US dollars, the amount thereof and (b) in the case of Canadian Borrowings denominated in Canadian Dollars, the US Dollar Equivalent thereof most recently determined pursuant to Section 1.05.
"Assignment and Acceptance" means an assignment and acceptance entered into by a Bank and an Eligible Assignee, and accepted by the Administrative Agent, in substantially the form of Exhibit B hereto.
"Attributable Debt" means any particular sale and leaseback transaction under which the Guarantor or any of its Subsidiaries 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.
"BA Discount Proceeds" means, in respect of any Acceptance being purchased by a Canadian Bank on any day under this Agreement, an amount (rounded to the nearest whole Canadian cent, and with one-half of one Canadian cent being rounded up) calculated on such day by multiplying:
(a) the face amount of such Acceptance; by
(b) the quotient equal to one divided by the sum of one plus the product of:
(i) the Applicable BA Discount Rate applicable to such Acceptance; and
(ii) a fraction, the numerator of which is the number of days remaining in the term of such Acceptance and the denominator of which is 365;
with such quotient being rounded up or down to the nearest fifth decimal place and .000005 being rounded up.
"Banks" means the financial institutions named on Schedule I (as the same may be amended from time to time by the Administrative Agent to reflect assignments made in accordance with Section 8.06 of this Agreement), and any and all other financial institutions which from time to time become parties to this Agreement pursuant to the terms and conditions of Section 8.06 of this Agreement. Canadian Schedule II Banks named (whether as of the date hereof or by assignment) on Schedule I to this Agreement must enter into this Agreement together with a Designated Bank Affiliate (which shall also be named on Schedule I to this Agreement) which expressly agrees to be bound by the terms of, and to make Advances in accordance with, this Agreement.
"Board" means the Board of Governors of the Federal Reserve System of the United States of America or any successor thereto.
"Borrowers" means the Company and any Canadian Borrower.
"Borrowing" means a US Borrowing or a Canadian Borrowing.
"Business Day" means any day that is not a Saturday,
Sunday or other day on which commercial banks in New York City or
Dallas, Texas, are authorized or required by law to remain
closed; provided that (a) when used in connection with a
Eurodollar Rate Advance to the Company, the term "Business Day"
shall also exclude any day on which banks are not open for
dealings in US Dollar deposits in the London interbank market or
(b) when used in connection with a Canadian Borrowing, the term
"Business Day" shall exclude any day on which commercial banks
are not open for business in Toronto or Calgary, Canada and New
York City and when used in connection with a Eurodollar Rate
Advance to a Canadian Borrower, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in
US Dollar deposits in the London interbank market.
"Canadian Advance" means a Canadian Contract Advance or a Canadian Competitive Advance.
"Canadian Alternate Base Rate" means, for any day, a
rate per annum equal to the lesser of (a) the Maximum Rate and
(b) the greater of (i) the US Base Rate in effect on such day,
and (ii) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. For purposes hereof, "US Base Rate" means the
rate of interest per annum, announced from time to time by the
Canadian Sub-Agent as its base rate for lending US Dollars in
Canada (which base rate may not necessarily represent the lowest
or best rate actually charged to a customer); each change in the
US Base Rate shall be effective on the date such change is
announced as effective. For purposes hereof, "Federal Funds
Effective Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/16 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which
is a Business Day, the average (rounded upwards, if necessary, to
the next 1/16 of 1%) of the quotations for the day of such
transactions received by the Canadian Sub-Agent from three
Federal funds brokers of recognized standing selected by it. If
for any reason the Canadian Sub-Agent shall have determined
(which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability of the Canadian Sub-Agent
to obtain sufficient quotations in accordance with the terms
hereof, the Canadian Alternate Base Rate shall be determined
without regard to clause (b) (ii) of the first sentence of this
definition until the circumstances giving rise to such inability
no longer exist. Any change in the Canadian Alternate Base Rate
due to a change in the Maximum Rate, US Base Rate or the Federal
Funds Effective Rate shall be effective on the effective date of
such change in the Maximum Rate, US Base Rate or the Federal
Funds Effective Rate, respectively.
"Canadian Alternate Base Rate Advance" means a Canadian Contract Advance which bears interest computed at the Canadian Alternate Base Rate.
"Canadian Bank" means Canadian Schedule I Banks or Canadian Schedule II Banks which are residents of Canada for purposes of the Income Tax Act (Canada).
"Canadian Borrower" means any wholly owned Subsidiary of the Company that is organized under the laws of Canada or any jurisdiction therein and has been designated by the Company as a Canadian Borrower in accordance with Section 2.17 and has not ceased to be a Canadian Borrower as provided in such Section.
"Canadian Borrowing" means a Canadian Contract Borrowing or a Canadian Competitive Borrowing.
"Canadian Commitment" means, with respect to any Canadian Bank, the portion, if any, of such Canadian Bank's Commitment that constitutes its Canadian Commitment to make a Canadian Advance to a Canadian Borrower based upon allocations made by the Company in accordance with Section 2.17.
"Canadian Competitive Advance" means either an Acceptance created as part of, or a Eurodollar Rate Competitive Advance as part of, a Competitive Borrowing resulting from the competitive bidding procedures described in Section 2.03 and in paragraph (m) of Annex I.
"Canadian Competitive Borrowing" means a Competitive Borrowing consisting of Canadian Competitive Advances.
"Canadian Contract Advance" means either (a) an Acceptance created as part of a Contract Borrowing or (b) a Canadian Prime Rate Contract Advance or a Eurodollar Rate Contract Advance made as part of a Contract Borrowing by a Canadian Borrower.
"Canadian Contract Borrowing" means a Contract Borrowing in Canadian Dollars or US Dollars consisting of Canadian Contract Advances.
"Canadian Dollars" or "Canadian $" means lawful money of Canada.
"Canadian Dollar Equivalent" means, on any date of determination, with respect to any amount in US Dollars, the equivalent in Canadian Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.05.
"Canadian Exposure" means, at any time, the sum of the Assigned Dollar Values of outstanding Canadian Advances at such time.
"Canadian Lending Office" means, with respect to any Canadian Bank, the office or affiliate of such Canadian Bank specified as its "Canadian Lending Office" opposite its name on Schedule I hereto, or in the Assignment and Acceptance pursuant to which it became a Canadian Bank, or such other office or affiliate of such Canadian Bank as such Canadian Bank may from time to time specify to the Company, the Administrative Agent and the Canadian Sub-Agent.
"Canadian Prime Rate" means, for any day, a rate per annum equal to the greater of (a) the rate per annum announced from time to time by the Canadian Sub-Agent as its prime rate (being the reference rate it will use for determining interest rates on commercial loans denominated in Canadian Dollars to borrowers in Canada) in effect at its principal office in Toronto and (b) the One-Month CDOR Rate plus .625%. Each change in the Canadian Prime Rate shall be effective on the date such change is announced.
"Canadian Prime Rate Contract Advance" means a Canadian Contract Advance in Canadian Dollars which bears interest computed at the Canadian Prime Rate, payable monthly in arrears, from the date of advance thereof.
"Canadian Prime Rate Contract Borrowing" means a Canadian Contract Borrowing consisting of Canadian Prime Rate Contract Advances.
"Canadian Schedule I Bank" means a Bank that is named on Schedule I to the Bank Act (Canada).
"Canadian Schedule II Bank" means a Bank that is named on Schedule II to the Bank Act (Canada).
"Canadian Schedule II Reference Banks" means The Chase Manhattan Bank of Canada and Credit Suisse First Boston Canada, or such two other Canadian Schedule II Banks as may be selected by the Canadian Sub-Agent in consultation with the Company.
"Canadian Sub-Agent" means, initially, The Chase Manhattan Bank of Canada, or any other sub-agent appointed by the Administrative Agent pursuant to Section 7.07 of this Agreement.
"CDOR Rate" means, on any day, the annual rate of interest which is determined as being the arithmetic average, with respect to a particular term of Canadian Dollar bankers' acceptances, of the rates displayed and identified as such on the "Reuters' Screen CDOR Page" at approximately 10:00 a.m. (Toronto, Ontario time) on such day for banks listed on Schedule I to the Bank Act (Canada), or if such day is not a Business Day, then on the immediately preceding Business Day (as adjusted by a Canadian Bank after 10:00 a.m. (Toronto, Ontario time), to reflect any error in a posted rate of interest or in the posted average annual rate of interest).
"Change in Control" means (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 Guarantor unless the Board of Directors of the Guarantor shall have publicly announced its support for such acquisition or (b) a majority of the members of the Board of Directors of the Guarantor on any date shall not have been (i) members of the Board of Directors of the Guarantor 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 Guarantor as constituted on the date 12 months prior to such date.
"Class", when used in respect of any Commitment, Advance or Borrowing, refers to whether such Commitment is a US Commitment or a Canadian Commitment, or whether such Advance is a US Advance or a Canadian Advance, or whether such Borrowing is comprised of US Advances or Canadian Advances, as the case may be.
"Code" means the Internal Revenue Code of 1986, as the same may be amended from time to time.
"Commission" means 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 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" means, with respect to any Bank, the amount set forth opposite such Bank's name on Schedule I under the caption "Commitment", as such amount may be reduced pursuant to Section 2.06 or increased pursuant to Section 2.16 or reduced or increased by Section 8.06. The aggregate amount of the Commitments of all Banks on the date of this Agreement is $450,000,000.
"Company" has the meaning specified in the Introduction to this Agreement.
"Company Guarantee" means each Guarantee Agreement (as defined in the Original Credit Agreement) executed by the Company.
"Competitive Adjustment" means, as to any Bank as at any date, an amount equal to such Bank's pro rata (in accordance with the Commitments) share of the aggregate amount (based on Assigned Dollar Values, in the case of Canadian Advances) of all Competitive Advances outstanding on such date (giving effect to the payment of any Competitive Advances to be made on such date).
"Competitive Advance" means a US Competitive Advance or a Canadian Competitive Advance.
"Competitive Borrowing" means a Borrowing consisting of simultaneous Competitive Advances of the same Type and Class made to the same Borrower from each of the Banks whose offer to make Competitive Advances as part of such Borrowing has been accepted by such Borrower under the competitive bidding procedures described in Section 2.03 and in paragraph (m) of Annex I.
"Consolidated Indebtedness" means, at any time, the Indebtedness of the Guarantor 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 Guarantor or its Subsidiaries that is non-recourse to the Guarantor or the Borrowers.
"Consolidated Stockholders' Equity" means the par or stated value of the stock of the Guarantor plus paid-in capital plus retained earnings, all as shown on the consolidated balance sheet of the Guarantor and its Subsidiaries prepared in accordance with generally accepted accounting principles, as such principles are in effect on the date of this Agreement.
"Contract Advance" means a US Contract Advance or a Canadian Contract Advance.
"Contract Borrowing" means a Borrowing consisting of
simultaneous Contract Advances of the same Type and Class made to
the same Borrower ratably by all of the Banks pursuant to Section
2.01(a) or ratably by all of the Canadian Banks pursuant to
Section 2.01(b).
"Defaulting Bank" means any Bank that shall (i) fail to make any Advance 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 Advance 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 and the Guarantor.
"Designated Bank Affiliate" means a US affiliate of a Canadian Schedule II Bank which is a party to this Agreement.
"Discount Note" has the meaning specified in paragraph
(i) of Annex I.
"Domestic Lending Office" means, with respect to any
Bank, the office or affiliate of such Bank specified as its
"Domestic Lending Office" opposite its name on Schedule I hereto
or in the Assignment and Acceptance pursuant to which it became a
Bank, or such other office or affiliate of such Bank as such Bank
may from time to time specify to the Company and the
Administrative Agent.
"Domestic Reserve Percentage" means, for any Interest
Period, the reserve percentage applicable on the first day of
such Interest Period under regulations issued from time to time
by the Board for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or
other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City, with deposits exceeding
one billion US Dollars with respect to liabilities consisting of
or including (among other liabilities) US Dollar nonpersonal time
deposits in the United States of America with a maturity equal to
such Interest Period.
"Draft" means a draft or bill of exchange or depository bill within the meaning of the Depository Bills and Notes Act (Canada), payable in Canadian Dollars, in the form used from time to time by each Canadian Bank, respectively, in connection with the creation of Acceptances in accordance with the provisions of Annex I.
"Eligible Assignee" means: (a) any of the following
entities: (i) a commercial bank or other financial institution
organized under the laws of the United States of America, or any
state thereof, and having total assets in excess of
$3,000,000,000 and a combined capital and surplus of at least
$150,000,000; (ii) a commercial bank or other financial
institution organized under the laws of any other country which
is a member of the OECD, or a political subdivision of any such
country, and having total assets in excess of $3,000,000,000 and
a combined capital and surplus of at least $150,000,000; provided
that such bank or financial institution is acting through a
branch or agency located in the United States of America, in the
country in which it is organized or in another country which is
also a member of the OECD; and (iii) the central bank of any
country which is a member of the OECD, (b) a Bank or an Affiliate
of any Bank; provided that with regard to clause (a) and clause
(b) of this sentence an "Eligible Assignee" of a Canadian Bank
must be a Canadian Bank if the assignee will have a Maximum
Canadian Commitment Amount and provided further that an assignee
which is a Canadian Schedule II Bank must enter into this
Agreement together with a Designated Bank Affiliate (which shall
also be named on Schedule I to this Agreement) which expressly
agrees to be bound by the terms of, and to make Advances in
accordance with, this Agreement, or (c) upon the occurrence and
during the continuance of an Event of Default, any other Person.
"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation D.
"Eurodollar Lending Office" means, with respect to any Bank, the office or affiliate of such Bank specified as its "Eurodollar Lending Office" opposite its name on Schedule I hereto or in the Assignment and Acceptance pursuant to which it became a Bank (or, if no such office or affiliate is specified, its Domestic Lending Office), or such other office or affiliate of such Bank as such Bank may from time to time specify to the Company and the Administrative Agent.
"Eurodollar Rate" means, for each Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate per annum equal to the lesser of (a) the Maximum Rate and (b) a rate of interest determined on the basis of at least two offered rates for deposits in US Dollars for a period equal to the applicable Interest Period commencing on the first day of such Interest Period, appearing on the Reuters Screen LIBO Page as of 11:00 a.m. (London time) on the day that is two Business Days prior to the first day of the Interest Period. If at least two such offered rates appear on the Reuters Screen LIBO Page, the rate with respect to such Interest Period will be the arithmetic average (rounded upwards to the next 1/16th of 1%) of such offered rates. If fewer than two offered rates appear, "Eurodollar Rate" in respect of any Interest Period will be determined on the basis of the rates at which deposits in US Dollars are offered by the Administrative Agent at approximately 11:00 a.m. (London time) on the day that is two Business Days preceding the first day of such Interest Period to prime banks in the London interbank market for a period equal to such Interest Period commencing on the first day of such Interest Period.
"Eurodollar Rate Advance" means any Eurodollar Rate Contract Advance or Eurodollar Rate Competitive Advance.
"Eurodollar Rate Competitive Advance" means a Competitive Advance which bears interest based on the Eurodollar Rate.
"Eurodollar Rate Contract Advance" means a Contract Advance in US Dollars which bears interest based on the Eurodollar Rate.
"Eurodollar Rate Contract Borrowing" means a Contract Borrowing that bears interest based on the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" of any Bank for any Eurodollar Rate Advance means the reserve percentage applicable to such Bank on (a) in the case of a Contract Advance, the first day of the Interest Period then applicable to such Contract Advance and (b) in the case of a Competitive Advance, the date of such Competitive Advance, under regulations issued from time to time by the Board for determining the reserve requirement (including, without limitation, any emergency, supplemental or other marginal reserve requirement) under Regulation D, or in the case of Canadian Banks, under rules or regulations issued by any governmental authority having or asserting lawful jurisdiction over the Canadian Banks, then applicable to such Bank with respect to liabilities or assets consisting of or including Eurocurrency Liabilities having a term equal to such Interest Period or the term of such Competitive Advance, as the case may be.
"Events of Default" has the meaning specified in Article VI.
"Exchange Rate" means, on any Business Day (a) with
respect to Canadian Dollars in relation to US Dollars, the spot
rate as quoted by the Bank of Canada as its noon spot rate at
which US Dollars are offered on such Business Day for Canadian
Dollars, and (b) with respect to US Dollars in relation to
Canadian Dollars, the spot rate as quoted by the Bank of Canada
as its noon spot rate at which Canadian Dollars are offered on
such day for US Dollars; provided that if at the time of any such
determination, for any reason, no such spot rate is being quoted,
the Administrative Agent, after consultation with the Company,
may use any reasonable method it deems appropriate to determine
such rate, and such determination shall be presumed correct
absent manifest error.
"Facility Fee" has the meaning given to such term in
Section 2.05.
"Federal Funds Effective Rate" has the meaning given to
such term in the definition of "US Alternate Base Rate" in this
Section 1.01.
"Financial Officer" of the Company shall mean its chief financial officer, principal accounting officer, Treasurer, or Controller or such other person or persons designated by the Company in writing to the Administrative Agent and the Canadian Sub-Agent (such written designation shall include name, title and an original specimen signature of each such person).
"Fixed Rate" means an interest rate per annum (expressed in the form of a decimal to no more than four decimal places) specified by a Bank making a US Competitive Advance under the competitive bidding procedure described in Section 2.03.
"Fixed Rate Competitive Advance" means a US Competitive Advance which bears interest based on the Fixed Rate.
"Guaranteed Obligations" has the meaning specified in
Section 9.01(a).
"Guarantor" has the meaning specified in the Introduction to this Agreement.
"Indebtedness" means 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.
"Index Debt" has the meaning specified in the definition of "Applicable Margin" in Section 1.01.
"Interest Period" means, (a) for each Contract Advance comprising part of the same Contract Borrowing, the period commencing on the date of such Contract Advance or on the last day of the immediately preceding Interest Period applicable to such Contract Advance, as the case may be, and ending on the last day of the period selected by the applicable Borrower pursuant to the provisions below; or (b) for each Competitive Advance comprising part of the same Competitive Borrowing, the period commencing on the date of such Competitive Advance and ending on the maturity selected by the applicable Borrower pursuant to the provisions of Section 2.03(a). The duration of each such Interest Period shall be (i) in the case of a Canadian Alternate Base Rate Advance or a US Alternate Base Rate Advance or a Canadian Prime Rate Contract Advance, one month, (ii) in the case of a Eurodollar Rate Advance, 1, 2, 3, or 6 months, as the applicable Borrower may select (in the case of Contract Advances) by notice to the Administrative Agent pursuant to Section 2.02(a), and in the case of Competitive Advances, by notice to Administrative Agent pursuant to Section 2.03(a) and (iii) in the case of an Acceptance Borrowing, 30, 60 or 90 days (or such other period as agreed to by the Canadian Sub-Agent and the Canadian Banks), as the applicable Canadian Borrower may select by notice pursuant to either Section 2.03(a) or paragraph (c) of Annex I attached hereto, as applicable; provided, however, that:
(A) Interest Periods commencing on the same date for Contract Advances comprising part of the same Contract Borrowing shall be of the same duration;
(B) whenever the last day of any Interest Period would otherwise occur on a day other than a Business Day in each of New York City , Dallas, Texas, Toronto, Ontario and London, the last day of such Interest Period shall be extended to occur on the next succeeding Business Day in all such cities; provided that in the case of any Interest Period for a Eurodollar Rate Advance, that if such extension would cause the last day of such Interest Period to occur in the next following calendar month, the last day of such Interest Period shall occur on the next preceding Business Day in all such cities; and
(C) no Interest Period shall end on a date later than the Maturity Date.
"Lien" means any mortgage, pledge, security interest, lien, encumbrance, 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 out of the production from which such production payment is payable.
"Loan Papers" means (a) this Agreement (including the Anadarko Guaranty), certificates delivered pursuant to this Agreement and Exhibits and Schedules thereto; (b) any Notices, Drafts, Acceptances and Discount Notes; (c) any notice designating a Canadian Borrower pursuant to Section 2.17; and (d) all renewals, extensions or restatements of, or supplements or amendments to, any of the foregoing.
"Majority Banks" means at any time Banks that in the aggregate (a) hold at least 51% of the sum of the Commitments at the time, or (b) after the expiry or termination of the Commitments, hold at least 51% of the aggregate unpaid principal amount of the Advances, determined based on Assigned Dollar Values in the case of Canadian Advances.
"Maturity Date" means October 24, 2001.
"Maximum Amount" and "Maximum Rate" means, for each Bank, the maximum non-usurious amount and the maximum nonusurious rate of interest which, under applicable law, such Bank is permitted to contract for, charge, take, reserve or receive on the Obligation.
"Maximum Canadian Allocation Amount" means
$298,200,000.
"Maximum Canadian Commitment Amount" means, with
respect to any Bank, the amount set forth opposite such Bank's
name on Schedule I under the caption "Canadian Commitment", which
represents the maximum portion of such Bank's Commitment that may
be allocated as its Canadian Commitment. The Maximum Canadian
Commitment Amount of any Bank shall not exceed its Commitment.
"Moody's" means Moody's Investors Service, Inc. or any successor thereto.
"Notice" means a Notice of Contract Borrowing, Notice of Competitive Borrowing or Notice of Drawing.
"Notice of Contract Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Competitive Borrowing" has the meaning specified in Section 2.03(a).
"Notice of Drawing" has the meaning specified in paragraph (d)(i) of Annex I.
"Obligation" means all present and future indebtedness, liabilities, and obligations, and all renewals and extensions thereof, or any part thereof, now or hereafter owed to Administrative Agent or any Bank by any Borrower arising from, by virtue of or pursuant to any Loan Paper, together with all interest accruing thereon, fees, costs and expenses payable under the Loan Papers.
"OECD" means the Organization for Economic Cooperation and Development, or any successor entity thereto.
"One-Month CDOR Rate" means, on any day, the annual
rate of interest which is the rate determined as being the
arithmetic average of the "BA 1 month" rates applicable to
Canadian Dollar bankers' acceptances displayed and identified as
such on the "Reuters' Screen CDOR Page" at approximately 10:00
a.m., Toronto time, on such day for banks listed on Schedule I to
the Bank Act (Canada), or if such day is not a Business Day then
on the immediately preceding Business Day (as adjusted by a
Canadian Bank after 10:00 a.m., Toronto time, to reflect any
error in a posted rate of interest or in the posted average
annual rate of interest).
"Original Closing Date" means October 27, 1998.
"Original Credit Agreement" has the meaning specified in the Recitals to this Agreement.
"Participating Bank" has the meaning specified in
Section 2.03(a)(v).
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"Principal Property" has the meaning specified in the
Public Indenture.
"Public Indenture" means the Indenture, dated as of May 10, 1988, between the Guarantor and Continental Illinois National Bank and Trust Company of Chicago (now known as Bank of America, N.A.), as Trustee, as amended by the First Supplemental Indenture, dated as of November 15, 1991, between the Guarantor and Continental Bank N.A. (now known as Bank of America, N.A.) and another First Supplemental Indenture dated as of April 15, 1999 between the Guarantor and Harris Trust and Savings Bank, as successor Trustee.
"Restatement Date" means the date upon which the conditions specified in Section 3.01 are first satisfied (or waived in accordance with Section 8.01).
"Revaluation Date" means the last Business Day of each March, June, September and December and such other Business Days as the Company may request by prior notice to the Administrative Agent.
"S&P" means Standard and Poor's Rating Group, a division of The McGraw-Hill Company, Inc., a New York corporation, or any successor thereto.
"Subsidiary" means, as to any Person, any corporation or other similar entity of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the Board of Directors of such corporation or entity (irrespective of whether or not at the time capital stock of any other class or classes of such corporation or entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of the such Person.
"Termination Date" means the earlier of the Maturity Date, or the date on which the Commitments shall terminate in accordance with the terms of this Agreement.
"Transactions" means the execution, delivery and performance by the Guarantor and each Borrower of the Loan Papers to which it is or is to be a party, the borrowing of Advances and the use of the proceeds thereof.
"Type", when used in respect of any Advance or Borrowing, refers to the Rate by reference to which interest on such Advance or on the Advances comprising such Borrowing is determined. For purposes hereof, "Rate" shall include the Eurodollar Rate, the US Alternate Base Rate, the Fixed Rate and, in the case of a Canadian Advance, the Canadian Prime Rate, the Canadian Alternate Base Rate, and, in the case of an Acceptance, the Applicable BA Discount Rate.
"US Advance" means a US Contract Advance or a US Competitive Advance, in either case, in US Dollars.
"US Alternate Base Rate" means, for any day, a rate per
annum equal to the lesser of (a) the Maximum Rate and (b) the
greatest of (i) the US Prime Rate in effect on such day, (ii) the
Base CD Rate in effect on such day plus 1% and (iii) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof, "US Prime Rate" means the rate of interest per
annum, publicly announced from time to time by the Administrative
Agent as its prime rate in effect at its principal office in New
York City (which prime rate may not necessarily represent the
lowest or best rate actually charged to a customer); each change
in the US Prime Rate shall be effective on the date such change
is publicly announced as effective. "Base CD Rate" means the sum
of (a) the product of (i) the Three-Month Secondary CD Rate and
(ii) 1.00 plus the Domestic Reserve Percentage and (b) the
Assessment Rate. "Three-Month Secondary CD Rate" means, for any
day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day
shall not be a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such
day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average (rounded upwards,
if necessary, to the next 1/16 of 1%) of the secondary market
quotations for three-month certificates of deposit of major money
center banks received at approximately 10:00 a.m. (New York City
time) on such day (or, if such day shall not be a Business Day,
on the next preceding Business Day) by the Administrative Agent
from three New York City negotiable certificate of deposit
dealers of recognized standing selected by it. "Federal Funds
Effective Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/16 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which
is a Business Day, the average (rounded upwards, if necessary, to
the next 1/16 of 1%) of the quotations for the day of such
transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it. If
for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error)
that it is unable to ascertain the Base CD Rate or the Federal
Funds Effective Rate or both for any reason, including the
inability of the Administrative Agent to obtain sufficient
quotations in accordance with the terms hereof, the US Alternate
Base Rate shall be determined without regard to clause (b) of the
first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any
change in the US Alternate Base Rate due to a change in the
Maximum Rate, US Prime Rate, the Three-Month Secondary CD Rate or
the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Maximum Rate, US Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective
Rate, respectively.
"US Alternate Base Rate Advance" means a US Contract Advance which bears interest computed at the US Alternate Base Rate.
"US Borrowing" means a US Contract Borrowing or a US
Competitive Borrowing, in either case, in US Dollars.
"US Commitment" means, with respect to any Bank, its
Commitment reduced by the amount, if any, of its Canadian
Commitment at the time.
"US Competitive Advance" means an advance by a Bank to the Company denominated in US Dollars as part of a Competitive Borrowing resulting from the competitive bidding procedure described in Section 2.03, and refers to a Fixed Rate Competitive Advance or a Eurodollar Rate Competitive Advance.
"US Competitive Borrowing" means a Competitive Borrowing consisting of US Competitive Advances.
"US Contract Advance" means an advance by a Bank denominated in US Dollars to the Company as part of a Contract Borrowing and refers to an Alternate Base Rate Advance or a Eurodollar Rate Contract Advance.
"US Contract Borrowing" means a Contract Borrowing in US Dollars consisting of US Contract Advances.
"US Dollar Equivalent" means, on any date of determination, with respect to any amount in Canadian Dollars, the equivalent in US Dollars of such amount, determined by the Administrative Agent pursuant to Section 1.05.
"US Dollars" or "$" means lawful money of the United States of America.
SECTION 1.02. Computation of Time Periods . In this Agreement in the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each means "to but excluding".
SECTION 1.03. Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles from time to time in effect, and all accounting principles shall be applied on a consistent basis so that the accounting principles in a current period are comparable in all respects to those applied during the preceding comparable period.
SECTION 1.04. Number and Gender of Words . Whenever in any Loan Papers the singular number is used, the same shall include the plural, where appropriate, and vice versa, and words of any gender shall include each other gender, where appropriate.
SECTION 1.05. Exchange Rates and Assigned Dollar Values . (a) On the date on which any Canadian Borrowing denominated in Canadian Dollars is to be made, the Administrative Agent shall determine the Exchange Rate as of such date for purposes of determining the US Dollar Equivalent of the Canadian Dollar amount of such Borrowing specified in the applicable Notice. The initial Assigned Dollar Value of such Borrowing shall be the US Dollar Equivalent so determined.
(b) On each Revaluation Date on which any Canadian Borrowing denominated in Canadian Dollars is outstanding, the Administrative Agent shall determine the US Dollar Equivalent of each such outstanding Canadian Borrowing based on the applicable Exchange Rate as of such Revaluation Date, and the Assigned Dollar Value of each such Borrowing shall be adjusted to equal the US Dollar Equivalent so determined. The Administrative Agent shall notify the Banks and the Company of the Exchange Rate and Assigned Dollar Values so determined and the resulting Canadian Exposure.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Commitments . (a) Each Bank (other than each Canadian Schedule II Bank) severally agrees, on the terms and conditions hereinafter set forth, to make US Contract Advances to the Company, in US Dollars, from time to time on any Business Day during the period from the Original Closing Date until the Termination Date in an aggregate amount not to exceed at any time outstanding such Bank's US Commitment; provided, however, that at no time shall the aggregate outstanding principal amount of US Contract Advances and US Competitive Advances exceed the aggregate amount of the US Commitments. Each US Contract Borrowing shall be in an aggregate amount of not less than $10,000,000 (subject to the terms of this Section 2.01(a)) or an integral multiple of $5,000,000 in excess thereof and shall consist of US Contract Advances of the same Type made on the same day by the Banks ratably according to their respective US Commitments.
(b) Each Canadian Bank severally agrees, on the terms
and conditions hereinafter set forth, to make Canadian Contract
Advances to any Canadian Borrower from time to time on any
Business Day during the period from the Original Closing Date
until the Termination Date in an aggregate amount (based on the
face amount thereof, in the case of Acceptances) the Assigned
Dollar Values of which shall not exceed at any time outstanding
such Bank's Canadian Commitment; provided, however, that at no
time shall the Canadian Exposure exceed the aggregate amount of
the Canadian Commitments. In the case of Canadian Contract
Advances consisting of Acceptances, such Advances shall be made
by the issuance by the applicable Canadian Borrower, and
acceptance by the applicable Canadian Banks, of Drafts
denominated in Canadian Dollars in the manner referred to in
Section 2.18. Each Canadian Contract Borrowing shall be in an
aggregate amount of not less than Canadian $10,000,000 (or, in
the case of Eurodollar Rate Contract Borrowings, $10,000,000)
(subject to the terms of this Section 2.01(b)) or an integral
multiple of Canadian $5,000,000 (or, in the case of Eurodollar
Rate Contract Borrowings, $5,000,000) in excess thereof and shall
consist of Canadian Contract Advances made to the same Canadian
Borrower on the same day by the Canadian Banks ratably
accordingly to their respective Canadian Commitments.
(c) Within the limits and on the conditions set forth in this Section 2.01, each Borrower may from time to time borrow under this Section 2.01, prepay under Section 2.07(c) and reborrow under this Section 2.01.
SECTION 2.02. Making the Contract Advances . (a)
Each Contract Borrowing (other than Canadian Contract Borrowings
consisting of Acceptances, as to which this Section shall not
apply) shall be made on notice, given (i) in the case of a US
Borrowing consisting of US Alternate Base Rate Advances, not
later than 11:00 a.m. (New York City time) on the Business Day
prior to the date of the proposed Borrowing; (ii) in the case of
a US Borrowing consisting of Eurodollar Rate Contract Advances,
not later than 11:00 a.m. (New York City time) on the third
Business Day prior to the date of the proposed Contract
Borrowing; (iii) in the case of a Canadian Borrowing consisting
of Canadian Prime Rate Contract Advances, no later than 11:00
a.m. (Toronto time) on the first Business Day prior to the date
of the proposed Contract Borrowing; and (iv) in the case of a
Canadian Borrowing consisting of Eurodollar Rate Contract
Advances, not later than 11:00 a.m. (Toronto time) on the third
Business Day prior to the date of the proposed Contract Borrowing
by the Company to the Administrative Agent, which shall give to
each Bank or Canadian Bank, as applicable, prompt notice thereof
by cable or telecopy. Each such notice of a Contract Borrowing
(a "Notice of Contract Borrowing") shall be in substantially the
form of Exhibit A-1 hereto, specifying therein the requested (i)
date of such Contract Borrowing, (ii) Type and Class of Contract
Advances comprising such Contract Borrowing, (iii) aggregate
amount of such Contract Borrowing (expressed in US Dollars, in
the case of a US Borrowing, or Canadian Dollars, in the case of a
Canadian Borrowing), (iv) Interest Period and (v) in the case of
a Canadian Borrowing, the identity of the Canadian Borrower.
Each Bank or Canadian Bank, as applicable, shall, before 12:00
noon (New York City time) on the date of any such Contract
Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address
referred to in Section 8.02 (or, in the case of a Canadian
Borrowing, to an account in Toronto, Canada, designated by the
Administrative Agent for such purpose), in same day funds, such
Bank's or Canadian Bank's ratable portion of such Contract
Borrowing. Upon the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in
Article III, the Administrative Agent will make such funds
available to the applicable Borrower at the Administrative
Agent's aforesaid address (or, in the case of a Canadian
Borrowing, at such account as shall be mutually agreed by the
Administrative Agent and the applicable Borrower).
(b) Each Notice of Contract Borrowing shall be irrevocable and binding on the applicable Borrower. In the case of any Contract Borrowing which the related Notice of Contract Borrowing specifies is to be comprised of Eurodollar Rate Contract Advances, the applicable Borrower shall indemnify each Bank against any loss, cost or expense incurred by such Bank as a result of any failure by such Borrower to complete such Borrowing (whether or not due to a failure to fulfill on or before the date specified in such Notice of Contract Borrowing the applicable conditions set forth in Article III), such losses, costs and expenses to include, without limitation, any loss (including loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund the Contract Advance to be made by such Bank as part of such Contract Borrowing when such Contract Advance, as a result of such failure, is not made on such date.
(c) Unless the Administrative Agent shall have
received notice from a Bank prior to the date of any Contract
Borrowing that such Bank will not make available to the
Administrative Agent such Bank's ratable portion of such Contract
Borrowing, the Administrative Agent may assume that such Bank has
made such portion available to the Administrative Agent on the
date of such Contract Borrowing in accordance with Section
2.02(a) and the Administrative Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such
date a corresponding amount. If and to the extent that such Bank
shall not have so made such ratable portion available to the
Administrative Agent, such Bank and the applicable Borrower
severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount (in the same currency), together
with interest thereon, for each day from the date such amount is
made available to such Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of such
Borrower, the interest rate applicable at the time to Contract
Advances comprising such Contract Borrowing and (ii) in the case
of a Canadian Prime Rate Contract Advance by such Canadian Bank,
an interest rate equal to the Canadian Prime Rate plus 1.0%, and
(iii) in the case of any other Contact Advance by such Bank, an
interest rate equal at all times to the Federal Funds Effective
Rate. If such Bank shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such
Bank's Contract Advance as part of such Contract Borrowing for
purposes of this Agreement.
(d) The failure of any Bank to make the Contract Advance to be made by it as part of any Contract Borrowing shall not relieve any other Bank of its obligation, if any, hereunder to make its Contract Advance on the date of such Contract Borrowing, but no Bank shall be responsible for the failure of any other Bank to make the Contract Advance to be made by such other Bank on the date of any Contract Borrowing.
SECTION 2.03. The Competitive Advances . (a) Each
Bank (other than each Canadian Schedule II Bank) severally agrees
that the Company may request US Competitive Borrowings under this
Section 2.03 from time to time on any Business Day during the
period from the Original Closing Date until the Termination Date,
in each case on the terms and conditions hereinafter set forth;
provided, however, that at no time shall the aggregate amount of
US Contract Advances and US Competitive Advances outstanding
exceed the aggregate amount of the US Commitments. Each US
Competitive Borrowing shall consist of US Competitive Advances of
the same Type made on the same day. Each Canadian Bank severally
agrees that any Canadian Borrower may request Canadian
Competitive Borrowings under this Section 2.03 from time to time
on any Business Day during the period from the Original Closing
Date until the Termination Date, in each case on the terms and
conditions hereinafter set forth; provided, however, that at no
time shall the total Assigned Dollar Values of the aggregate
amount of Canadian Contract Advances and Canadian Competitive
Advances outstanding exceed the aggregate amount of the Canadian
Commitments. Each Canadian Competitive Borrowing shall consist
of Canadian Competitive Advances of the same Type made to the
same Canadian Borrower on the same day.
(i) The Company may request a US Competitive Borrowing
and any Canadian Borrower may request a Canadian Competitive
Borrowing, under this Section 2.03 by delivering to the
Administrative Agent (A) in the case of a Borrowing
consisting of Fixed Rate Competitive Advances, by not later
than 10:00 a.m. (New York City time) on the Business Day
prior to the day of the proposed Competitive Borrowing, (B)
in the case of an Acceptance Borrowing, by not later than
11:00 a.m. (New York City time) on the second Business Day
prior to the day of the proposed Competitive Borrowing and
(C) in the case of a Borrowing consisting of Eurodollar Rate
Competitive Advances, by not later than 11:00 a.m. (New York
City time) on the fourth Business Day prior to the date of
the proposed Competitive Borrowing, a notice of a
Competitive Borrowing (a "Notice of Competitive Borrowing"),
in substantially the form of Exhibit A-2 hereto, specifying
the proposed (1) date of such Competitive Borrowing, (2)
Type and Class of Competitive Advances comprising such
Competitive Borrowing, (3) aggregate amount (which shall not
be less than $10,000,000 or an integral multiple of
$5,000,000 in excess thereof in respect of a US Competitive
Borrowing or a Eurodollar Rate Competitive Advance to a
Canadian Borrower, or Cdn$10,000,000 or an integral multiple
of Cdn$5,000,000 in respect of any Acceptance Borrowing) of
such Competitive Borrowing, (4) maturity date for repayment
of each Competitive Advance to be made as part of such
Competitive Borrowing (which maturity date shall be, in the
case of a Fixed Rate Competitive Borrowing, not earlier than
seven days after the date of such Borrowing, in the case of
an Acceptance Borrowing, not later than 30, 60 or 90 days
(or such other period as agreed to by the Canadian Sub-Agent
and the Canadian Banks) after the date of such Borrowing
and, in the case of a Eurodollar Rate Competitive Borrowing,
not later than 1, 2, 3 or 6 months after the date of such
Borrowing, as the Company shall elect and, in any case, on
or prior to the Termination Date) and (5) any other terms to
be applicable to such Competitive Borrowing and (6) in the
case of a Canadian Borrowing, the identity of the Canadian
Borrower. The Administrative Agent shall in turn promptly
deliver (by cable or telecopy) to each Bank or Canadian
Bank, as applicable, a notice of competitive bid request (a
"Notice of Competitive Bid Request"), in substantially the
form of Exhibit A-3, notifying the Banks or Canadian Banks,
as applicable, of each request for a Competitive Borrowing
received by it from the Company and of the terms contained
in such Notice of Competitive Borrowing.
(ii) Each Bank or Canadian Bank, as applicable, shall,
if, in its sole discretion, it elects to do so, irrevocably
offer to make one or more Competitive Advances to the
applicable Borrower as part of such proposed Competitive
Borrowing at a rate or rates of interest specified by such
Bank in its sole discretion, by notifying (by telecopy,
cable or telephone (in the case of telephone, immediately
confirmed by telecopy)) the Administrative Agent (which
shall give prompt notice thereof to the Company), (A) in the
case of a Fixed Rate Competitive Borrowing, not later than
9:30 a.m. (New York City time) on the date of such proposed
Competitive Borrowing specified in the Notice of Competitive
Borrowing delivered with respect thereto, (B) in the case of
an Acceptance Borrowing, not later than 9:30 a.m. (New York
City time) on the first Business Day prior to the date of
such proposed Competitive Borrowing specified in the Notice
of Competitive Borrowing delivered with respect thereto, and
(C) in the case of a Eurodollar Rate Competitive Borrowing,
not later than 9:30 a.m. (New York City time) on the third
Business Day prior to the date of such proposed Competitive
Borrowing specified in the Notice of Competitive Borrowing
delivered with respect thereto, of the maximum amount of
each Competitive Advance which such Bank would be willing to
make as part of such proposed Competitive Borrowing (which
amount may, subject to the provisos to the first and second
sentences of this Section 2.03(a), exceed such Bank's
Commitment of the applicable Class), the rate or rates of
interest therefor (and whether reserves are included
therein) and such Bank's Applicable Lending Office with
respect to each such Competitive Advance and any other
terms and conditions required by such Bank; provided that,
if the Administrative Agent in its capacity as a Bank shall,
in its sole discretion, elect to make any such offer, it
shall notify the Company of such offer no later than one
quarter of an hour before the time specified herein for
notice of offers by the other Banks. Each competitive bid
shall be submitted by a Bank to the Administrative Agent on
a competitive bid form (a "Competitive Bid"), substantially
similar to Exhibit A-4. If any Bank shall fail to notify
the Administrative Agent, before the time specified herein
for notice of offers, that it elects to make such an offer,
such Bank shall be deemed to have elected not to make such
an offer, and such Bank shall not be obligated or entitled
to, and shall not, make any Competitive Advance as part of
such Competitive Borrowing. If any Bank shall provide
telephonic notice to the Administrative Agent of its
election to make an offer, but such telephonic notice has
not been confirmed by telecopy to the Administrative Agent
at or before the time specified herein for notice of offers,
the Administrative Agent may, in its sole discretion and
without liability to such Bank or the applicable Borrower,
elect whether or not to provide notice thereof to the
Company.
(iii) The applicable Borrower shall, in turn, (A)
in the case of a Fixed Rate Competitive Borrowing, not later
than 10:30 a.m. (New York City time) on the date of such
proposed Competitive Borrowing specified in the Notice of
Competitive Borrowing delivered with respect thereto, (B) in
the case of an Acceptance Borrowing, not later than 10:30
a.m. (New York City time) on the first Business Day prior to
the date of such proposed Competitive Borrowing specified in
the Notice of Competitive Borrowing delivered with respect
thereto, and (C) in the case of a Eurodollar Rate
Competitive Borrowing, not later than 10:30 a.m. (New York
City time) on the third Business Day prior to the date of
such proposed Competitive Borrowing specified in the Notice
of Competitive Borrowing delivered with respect thereto,
either:
(A) cancel such proposed Competitive Borrowing by giving the Administrative Agent notice to that effect, or
(B) accept one or more of the offers made by any
Bank or Banks pursuant to paragraph (ii) above, in its
sole discretion, by giving notice to the Administrative
Agent of the amount of each Competitive Advance (which
amount shall be equal to or greater than $5,000,000 in
respect of a US Competitive Borrowing or a Eurodollar
Rate Competitive Advance to a Canadian Borrower, or
Cdn$5,000,000 in respect of any other Canadian
Competitive Borrowing, and equal to or less than the
maximum amount offered by such Bank, notified to the
Company by the Administrative Agent on behalf of such
Bank for such Competitive Advance pursuant to paragraph
(ii) above) to be made by each Bank as part of such
Competitive Borrowing, and reject any remaining offers
made by Banks pursuant to paragraph (ii) above, by
giving the Administrative Agent notice to that effect;
provided, however, that the aggregate amount of such
offers accepted by the Company shall be equal at least
to $10,000,000 or an integral multiple of $5,000,000 in
excess thereof in respect of a US Competitive Borrowing
or a Eurodollar Rate Competitive Advance to a Canadian
Borrower, or to Cdn$10,000,000 or an integral multiple
of Cdn$5,000,000 in excess thereof in respect of any
other Canadian Competitive Borrowing. Each such notice
of competitive bid acceptance/rejection (a "Competitive
Bid Accept/Reject Letter") from the Company shall be in
a form substantially similar to Exhibit A-5.
(iv) If any Borrower notifies the Administrative Agent that such Competitive Borrowing is canceled pursuant to paragraph (iii)(A) above, the Administrative Agent shall give prompt notice (by cable or telecopy) thereof to the Banks or Canadian Banks, as applicable, and such Competitive Borrowing shall not be made.
(v) If any Borrower accepts one or more of the offers made by any Bank or Banks pursuant to paragraph (iii)(B) above, such offer or offers and the Notice of Competitive Borrowing in respect thereof shall constitute a supplement to this Agreement in respect of such Competitive Borrowing and the Competitive Advances made pursuant thereto, and the Administrative Agent shall in turn promptly notify (A) each Bank that has made an offer as described in paragraph (ii) above of the date and aggregate amount of such Competitive Borrowing (expressed in US Dollars and, in the case of a Canadian Borrowing, in Canadian Dollars based on the Canadian Dollar Equivalent thereof), the interest rate thereon, and whether or not any offer or offers made by such Bank pursuant to paragraph (ii) above have been accepted by the Company, and (B) each Bank that is to make a Competitive Advance as part of such Competitive Borrowing (a "Participating Bank" as to such Competitive Borrowing) of the amount of each Competitive Advance to be made by such Bank as part of such Competitive Borrowing and the maturity date for the repayment of each such Competitive Advance (together with a confirmation of the Administrative Agent's understanding of the interest rate and any other terms applicable to each such Competitive Advance; the Administrative Agent shall assume, unless notified by such Bank to the contrary, that its understanding of such information is correct). Each such Participating Bank shall, before 12:00 noon (New York City time) on the date of such Competitive Borrowing specified in the notice received from the Administrative Agent pursuant to clause (A) of the preceding sentence, make available for the account of its Applicable Lending Office to the Administrative Agent (at its address referred to in Section 8.02 (or, in the case of a Canadian Borrowing, to an account designated by the Administrative Agent for such purpose)) such Bank's portion of such Competitive Borrowing, in same day funds, which, in the case of an Acceptance Borrowing, shall be made available in Canadian Dollars in an amount equal to the Canadian Equivalent of the US Dollar amount of the applicable Participating Bank's portion of such Borrowing. Upon fulfillment of the applicable conditions set forth in Article III and after receipt by the Administrative Agent of such funds, the Administrative Agent will make such funds available to the applicable Borrower at the Administrative Agent's aforesaid address (or, in the case of a Canadian Borrowing, at such account as shall be mutually agreed by the Administrative Agent and the applicable Borrower). Promptly after each Competitive Borrowing, the Administrative Agent will notify each Bank of the amount of the Competitive Borrowing (and, in the case of a Canadian Borrowing, the Assigned Dollar Value thereof), such Bank's Competitive Adjustment resulting therefrom, and the date upon which such Competitive Adjustment commenced and is anticipated to terminate.
(b) Within the limits and on the conditions set forth in this Section 2.03, any Borrower may from time to time borrow under this Section 2.03, repay pursuant to Section 2.07(b), prepay under Section 2.07(c) and reborrow under this Section 2.03.
(c) In addition to Competitive Borrowings conducted by
the Administrative Agent pursuant to the procedures set forth in
Section 2.03(a), any Borrower may conduct competitive auctions
for Competitive Advances. In the event that any Borrower elects
to conduct competitive auctions, such Borrower shall, (i) give
notice of such auction to the Canadian Sub-Agent and the
Administrative Agent, (ii) conduct each auction among all Banks
or Canadian Banks, as applicable, and (iii) in the event that
such Borrower elects to accept one or more bids, accept the
lowest bid or bids. The applicable Borrower shall promptly
notify the Canadian Sub-Agent and the Administrative Agent of the
terms and conditions of the Advances made pursuant to competitive
auctions conducted by such Borrower.
SECTION 2.04. Conversion and Continuation of Contract Borrowings . (a) The Borrowers shall have the right at any time upon prior irrevocable notice to the Administrative Agent (i) not later than 12:00 noon (New York City time), one Business Day prior to conversion, to convert any Contract Borrowing consisting of Eurodollar Rate Contract Advances into a Contract Borrowing consisting of US Alternate Base Rate Advances (in the case of a US Contract Borrowing) or Canadian Alternate Base Rate Advances (in the case of a Canadian Contract Borrowing), (ii) not later than 10:00 a.m. (New York City time), three Business Days prior to conversion or continuation, to convert any US Contract Borrowing consisting of US Alternate Base Rate Advances or any Canadian Contract Borrowing consisting of Canadian Alternate Base Rate Advances into a Contract Borrowing consisting of Eurodollar Rate Contract Advances or to continue any Contract Borrowing consisting of Eurodollar Rate Contract Advances for an additional Interest Period, and (iii) not later than 10:00 a.m. (New York City time), three Business Days prior to conversion, to convert the Interest Period with respect to any Contract Borrowing consisting of Eurodollar Rate Contract Advances to another permissible Interest Period subject in each case to the following:
(A) each conversion or continuation shall be made pro rata among the Banks or Canadian Banks, as applicable, in accordance with the respective principal amounts of the Advances comprising the converted or continued Contract Borrowing;
(B) if less than all the outstanding principal amount of any Contract Borrowing shall be converted or continued, the aggregate principal amount of such Contract Borrowing converted or continued shall be in an amount of $10,000,000 or an integral multiple of $5,000,000 in excess thereof (based on the initial Assigned Dollar Value thereof, in the case of a Canadian Borrowing);
(C) accrued interest on an Advance (or portion thereof) being converted shall be paid by the applicable Borrower at the time of conversion;
(D) if any Borrowing consisting of Eurodollar
Rate Contract Advances is converted at a time other
than at the end of the Interest Period applicable
thereto, the applicable Borrower shall pay, upon
demand, any amounts due to the Banks pursuant to
Section 8.04(b) as a result of such conversion;
(E) any portion of a Contract Borrowing maturing or required to be repaid in less than one month may not be converted into or continued as a Borrowing consisting of Eurodollar Rate Contract Advances;
(F) any portion of a Borrowing consisting of Eurodollar Rate Contract Advances which cannot be converted into or continued as such by reason of clause (E) above shall be automatically converted at the end of the Interest Period in effect for such Borrowing into a Borrowing consisting of US Alternate Base Rate Advances in the case of a US Borrowing or of Canadian Alternate Base Rate Advances in the case of a Canadian Borrowing; and
(G) no Interest Period may be selected for any Borrowing consisting of Eurodollar Rate Contract Advances that would end later than the Maturity Date.
(b) Each notice pursuant to clause (a) of this Section shall be irrevocable and shall refer to this Agreement and specify (i) the identity and amount of the Contract Borrowing that the Company requests be converted or continued, (ii) whether such Contract Borrowing is to be converted to or continued as a Borrowing consisting of Eurodollar Rate Contract Advances, US Alternate Base Rate Advances or Canadian Alternate Base Rate Advances, (iii) if such notice requests a conversion, the date of such conversion (which shall be a Business Day), and (iv) if such Contract Borrowing is to be converted to or continued as a Borrowing consisting of Eurodollar Rate Contract Advances, the Interest Period with respect thereto. If no Interest Period is specified in any such notice with respect to any conversion to or continuation as a Borrowing consisting of Eurodollar Rate Contract Advances, the Company shall be deemed to have selected an Interest Period of one month's duration. The Administrative Agent shall advise the other Banks of any notice given pursuant to this Section 2.04(b) and of each Bank's or Canadian Bank's, as applicable, portion of any converted or continued Contract Borrowing. If the Company shall not have given notice in accordance with this Section 2.04(b) to continue any Contract Borrowing into a subsequent Interest Period (and shall not otherwise have given notice in accordance with this Section 2.04 to convert such Contract Borrowing), such Contract Borrowing shall, at the end of the Interest Period applicable thereto (unless repaid pursuant to the terms hereof), automatically be continued into a new Interest Period as a Borrowing consisting of US Alternate Base Rate Advances in the case of a US Borrowing, or of Canadian Alternate Base Rate Advances in the case of a Canadian Borrowing. The conversion or continuation of any Contract Borrowing as herein shall not affect the Class of the applicable Borrowing or the identity of the Borrower thereof.
SECTION 2.05. Fees . (a) Facility Fees. The Company shall pay to each Bank, through the Administrative Agent, a facility fee (the "Facility Fee") on the average daily amount of the Commitment of such Bank (whether used or unused) (or, after such Bank's Commitment has terminated, on the outstanding principal amount of Contract Advances made by such Bank, based on the Assigned Dollar Value thereof in the case of Canadian Contract Advances) for the period from and including the Restatement Date up to, but excluding, the later of the Maturity Date and the date of repayment of all outstanding Contract Advances, at a rate per annum equal to the Applicable Margin for Facility Fees. Accrued Facility Fees shall be payable in arrears, commencing on the last day of the calendar quarter in which the Restatement Date occurs, and thereafter, quarterly on the last day of each March, June, September and December and on the Maturity Date; provided that any Facility Fees accruing after the Termination Date shall be payable contemporaneously with accrued interest on the Contract Advances on which such Facility Fees have accrued. Facility Fees shall be payable in US Dollars.
(b) Intentionally Omitted
(c) Acceptance Fee. Each Canadian Borrower agrees to
pay to each Canadian Bank a fee (the "Acceptance Fee") in
advance, at a rate per annum equal to the Applicable Margin, on
the date of issue of each Acceptance of such Canadian Bank
pursuant to a Canadian Borrowing. All Acceptance Fees shall be
calculated on the face amount of the Acceptance issued and
computed on the basis of the actual number of days in the term
thereof and a year of 365 days. Acceptance Fees shall be payable
in Canadian Dollars. The Acceptance Fee shall be in addition to
any other fees payable to each Canadian Bank in connection with
the issuance or discounting of such Acceptance.
SECTION 2.06. Reduction or Termination of the
Commitments . (a) Unless previously terminated, the Commitments
(including the US Commitments and Canadian Commitments) shall
terminate on the Termination Date.
(b) The Company shall have the right, upon at least three Business Days' irrevocable notice to the Administrative Agent, to terminate in whole or reduce ratably in part the respective Commitments of the Banks (which reductions shall be allocated, (i) in the case of Canadian Schedule I Banks, between their US Commitments and Canadian Commitments and (ii) in the case of Canadian Schedule II Banks, between the US Commitments of their Designated Bank Affiliates and the Canadian Commitments of the Canadian Schedule II Banks, in each case as specified in the notice of such reduction); provided, however, that (A) each partial reduction shall be in the aggregate amount of $10,000,000 or in an integral multiple of $5,000,000 in excess thereof, and (B) no such termination or reduction shall be made which would reduce the US Commitments to an amount less than the aggregate outstanding principal amount of the US Advances or would reduce the Canadian Commitments to an amount less than the Canadian Exposure. The Administrative Agent shall promptly thereafter notify each Bank of such termination or reduction.
SECTION 2.07. Repayment of Advances; Prepayment . (a) On the Maturity Date each Borrower shall repay to the Administrative Agent for the account of each Bank the principal amount of each Contract Advance made to such Borrower by such Bank.
(b) Each Borrower shall repay to the Administrative Agent, for the account of each Participating Bank which has made a Competitive Advance to such Borrower, on the maturity date of each Competitive Advance (such maturity date being that specified by the Company for repayment of such Competitive Advance in the Notice of Competitive Borrowing delivered with respect thereto) the then unpaid principal amount of such Competitive Advance.
(c) Any Borrower may, on notice given to the Administrative Agent (i) in the case of US Alternate Base Rate Advances, not later than 11:00 a.m. (New York City time) one Business Day prior to the day of the proposed prepayment, (ii) in the case of Canadian Alternate Base Rate Advances, not later than 11:00 a.m. (Toronto time) one Business Day prior to the day of the proposed prepayment, (iii) in the case of Eurodollar Rate Contract Advances, not later than 11:00 a.m. (New York City time) on the third Business Day prior to the day of the proposed prepayment and (iv) in the case of Canadian Prime Rate Contract Advances, not later than 11:00 a.m. (Toronto time) one Business Day prior to the day of the proposed prepayment, stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given, such Borrower shall, prepay the outstanding principal amounts of the Contract Advances constituting part of the same Contract Borrowing of such Borrower in whole or ratably in part; provided, however, that any such partial prepayment shall be in an aggregate principal amount not less than $10,000,000 (or Canadian $10,000,000, in the case of Canadian Prime Rate Contract Advances), or in an integral multiple of $5,000,000 (or Canadian $5,000,000, in the case of Canadian Prime Rate Contract Advances) in excess thereof. No Borrower may prepay any principal amount of any Competitive Advance unless the Participating Bank making such Competitive Advance shall have expressly agreed thereto. Acceptances may not be prepaid. The Administrative Agent shall promptly notify each Bank of any prepayments pursuant to this Section 2.07(c) promptly after any such prepayment. No Borrower shall have the right to prepay any principal amount of any Advance except as expressly set forth in this Section 2.07.
(d) On the date of any reduction or termination of the Commitments, the Borrowers shall pay or prepay so much of the Contract Advances (other than Acceptances) and the Canadian Borrowers shall deposit with the Canadian Sub-Agent cash collateral (in Canadian Dollars) to secure repayment of Acceptances, in each case in such amounts as shall be necessary in order that after giving effect to such reduction (i) the aggregate principal amount of outstanding Advances (based on Assigned Dollar Values, in the case of Canadian Advances), net of such cash collateral, shall not exceed the Commitments, (ii) the aggregate principal amount of outstanding US Advances shall not exceed the US Commitments and (iii) the Canadian Exposure, net of such cash collateral, shall not exceed the Canadian Commitments. In the event that, after giving effect to the prepayment of Contract Advances and deposit of cash collateral in respect of Acceptances pursuant to this paragraph, there remain outstanding Competitive Advances in a principal amount greater than the amount permitted by the preceding sentence, the Borrowers shall not be required to prepay such Competitive Advances unless Banks holding such Competitive Advances request prepayment, in which event the Borrowers shall prepay such Competitive Advances; provided that the Borrowers shall not be required to so prepay Competitive Advances after the outstanding principal amount of Competitive Advances has been reduced by the amount required to comply with this paragraph.
(e) If, after giving affect to any adjustment of Assigned Dollar Values on any Revaluation Date, the Canadian Exposure (net of cash collateral deposited with the Canadian Sub- Agent to secure repayment of Acceptances as provided herein) exceeds 110% of the total Canadian Commitments, the Canadian Borrowers shall, within three Business Days thereafter, prepay Canadian Prime Rate Contract Advances or Eurodollar Rate Contract Advances or deposit cash collateral (in Canadian Dollars) with the Canadian Sub-Agent to secure repayment of Acceptances in an amount sufficient to eliminate such excess.
(f) Any prepayment of Eurodollar Rate Contract Advances pursuant to any paragraph of this Section shall be subject to the provisions of Section 8.04(b) hereof.
(g) Any cash collateral deposited with the Canadian Sub-Agent pursuant to Section 2.07(d) hereof shall be released by the Canadian Sub-Agent to the Canadian Borrowers within three Business Days after the maturity and payment in full by the applicable Canadian Borrower of Acceptances to the extent that such payment in full causes the cash collateral to no longer be required pursuant to Section 2.07(d). Any cash collateral deposited with the Canadian Sub-Agent pursuant to Section 2.07(e) hereof shall be released by the Canadian Sub-Agent to the Canadian Borrowers within three Business Days after each Revaluation Date to the extent that adjustments of the Assigned Dollar Values cause the cash collateral to no longer be required pursuant to Section 2.07(e).
SECTION 2.08. Interest . Each Borrower shall pay interest on each Advance made by each Bank to such Borrower from the date of such Advance until paid in full, at the following rates per annum:
(a) Contract Advances. If such Advance is a Contract
Advance (other than an Acceptance), the Applicable Rate from time
to time for such Contract Advance from the date of such Advance
until the last day of the last Interest Period therefor, payable
on the last day of each Interest Period and, in the case of any
Interest Period longer than three months, on the last day of such
three-month period, as the case may be.
(b) Competitive Advances. If such Advance is a
Competitive Advance (other than an Acceptance), a rate per annum
equal at all times from the date of such Advance until the
maturity thereof to the rate of interest for such Competitive
Advance specified by the Participating Bank making such
Competitive Advance in its Competitive Bid with respect thereto
delivered pursuant to Section 2.03(a)(ii) above, payable on the
proposed maturity date specified by the Company for such
Competitive Advance in the related Notice of Competitive
Borrowing delivered pursuant to Section 2.03(a)(i) above;
provided that in the case of Advances with maturities of greater
than three months, interest shall be payable at the end of each
three-month period for such Advance.
(c) Default Amounts. In the case of any past-due amounts of the principal of, or (to the fullest extent permitted by law) interest on, any Advance, from the date such amount becomes due until paid in full, payable on demand, a rate per annum equal at all times to (i) 2% above the Eurodollar Rate in the case of any outstanding Eurodollar Rate Advances until the end of their respective Interest Periods, (ii) 2% above the US Alternate Base Rate in the case of amounts payable with respect to a US Advance other than a Eurodollar Rate Advance, or (iii) 2% above the Canadian Prime Rate in the case of amounts payable with respect to a Canadian Advance other than a Eurodollar Rate Advance, in effect from time to time.
SECTION 2.09. Alternate Rate of Interest . If Banks having more than 66-2/3% of the sum of the Commitments of the applicable Class shall, at least one Business Day before the date of any requested Eurodollar Rate Contract Borrowing (including any requested conversion or continuation of any such Borrowing), notify the Administrative Agent that the Eurodollar Rate for any Eurodollar Rate Advances comprising such Borrowing will not adequately reflect the cost to such Banks of making or funding their respective Advances for such Borrowing, the right of the Company to select Advances of such Type for such Borrowing or any subsequent Borrowing shall be suspended until the Administrative Agent shall notify the Company and the Banks that the circumstances causing such suspension no longer exist, and (a) any request by the Company for a Eurodollar Rate Competitive Advance shall be of no force and effect and shall be denied by the Administrative Agent and (b) any request by the Company for a Eurodollar Rate Contract Advance as part of a US Contract Advance shall be deemed to be a request for a US Alternate Base Rate Advance or, if as part of a Canadian Contract Advance, shall be deemed to be a request for a Canadian Alternate Base Rate Advance.
SECTION 2.10. Increased Costs; Increased Capital .
(a) If due to either (i) the introduction of or any change after
the date hereof (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate
Reserve Percentage) in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request
received from any central bank or other governmental authority
after the date hereof (whether or not having the force of law),
there shall be any increase in the cost to any Bank of agreeing
to make or making, funding, or maintaining Eurodollar Rate
Advances or Acceptances, then the applicable Borrower shall from
time to time, upon demand by such Bank (with a copy of such
demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Bank additional amounts sufficient
to compensate such Bank for such increased cost. Increased costs
shall not include income, stamp, or other taxes, imposts, duties,
charges, fees, deductions, or withholdings imposed, levied,
collected, withheld, or assessed by the United States of America
or Canada or any political subdivision or taxing authority
thereof or therein (including Puerto Rico) or of the country in
which any Bank's principal office or Applicable Lending Office
may be located or any political subdivision or taxing authority
thereof or therein. Each Bank agrees that, upon the occurrence
of any event giving rise to a demand under this Section 2.10(a)
with respect to the Eurodollar Lending Office of such Bank, it
will, if requested by the applicable Borrower and to the extent
permitted by law or the relevant governmental authority, endeavor
in good faith and consistent with its internal policies to avoid
or minimize the increase in costs resulting from such event by
endeavoring to change its Eurodollar Lending Office; provided,
however, that such avoidance or minimization can be made in such
a manner that such Bank, in its sole determination, suffers no
economic, legal, or regulatory disadvantage. A certificate as to
the amount of and specifying in reasonable detail the basis for
such increased cost, submitted to the Company and the
Administrative Agent by such Bank, shall constitute such demand
and shall, in the absence of manifest error, be conclusive and
binding for all purposes.
(b) If either (i) the introduction after the date hereof of, or any change after the date hereof in or in the interpretation of, any law or regulation or (ii) the compliance by any Bank with any guideline or request received from any central bank or other governmental authority after the date hereof (whether or not having the force of law), affects or would affect the amount of capital required or expected to be maintained by such Bank or any corporation controlling such Bank and such Bank determines that the amount of such capital is increased by or based upon the existence of its Advances or Commitment, then the applicable Borrower shall, from time to time, upon demand by such Bank (with a copy of such demand to the Administrative Agent), immediately pay to the Administrative Agent for the account of such Bank additional amounts sufficient to compensate such Bank to the extent that such Bank determined such increase in capital to be allocable to the existence of such Bank's Advances or Commitment. A certificate as to the amount of such increased capital and specifying in reasonable detail the basis therefor, submitted to the Company and the Administrative Agent by such Bank, shall constitute such demand and shall, in the absence of manifest error, be conclusive and binding for all purposes. Each Bank shall use all reasonable efforts to mitigate the effect upon the applicable Borrower of any such increased capital requirement and shall assess any cost related to such increased capital on a nondiscriminatory basis among the applicable Borrower and other borrowers of such Bank to which it applies and such Bank shall not be entitled to demand or be compensated for any increased capital requirement unless it is, as a result of such law, regulation, guideline, or request, such Bank's policy generally to seek to exercise such rights, where available, against other borrowers of such Bank.
(c) Notwithstanding the foregoing provisions of this
Section 2.10, (i) the applicable Borrower shall not be required
to reimburse any Bank for any increased costs incurred more than
three months prior to the date that such Bank notifies the
Company in writing thereof and (ii) in the event any Bank grants
a participation or assignment in an Advance pursuant to
Section 8.06, such Borrower shall not be obligated to reimburse
for increased costs with respect to such Advance to the extent
that the aggregate amount thereof exceeds the aggregate amount
for which such Borrower would have been obligated if such Bank
had not made such participation or assignment.
SECTION 2.11. Additional Interest on Eurodollar Rate
Advances . Each Borrower shall pay to the Administrative Agent
for the account of each Bank any costs which such Bank determines
are attributable to such Bank's compliance with regulations of
the Board (or of any other governmental authority having or
asserting lawful jurisdiction over any Canadian Bank) requiring
the maintenance of reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities. Such costs
shall be paid to the Administrative Agent for the account of such
Bank in the form of additional interest on the unpaid principal
amount of each Eurodollar Rate Advance of such Bank to such
Borrower, from the date of such Advance until such principal
amount is paid in full, at an interest rate per annum equal at
all times to the remainder obtained by subtracting (i) the
Eurodollar Rate for the applicable period for such Advance from
(ii) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage of such Bank for such period, payable on each date on
which interest is payable on such Advance. Such additional
interest shall be determined by such Bank and notified to the
Company and the Administrative Agent. A certificate setting
forth the amount of such additional interest, submitted to the
Company and the Administrative Agent by such Bank, shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.12. Change in Legality . If any Bank (as used in this paragraph, a "Notifying Bank") shall, at least three Business Days before the date of any requested Borrowing consisting of Eurodollar Rate Advances notify the Administrative Agent that the introduction of or any change in or in the interpretation of any law or regulation makes it unlawful, or that any central bank or other governmental authority asserts that it is unlawful, for such Notifying Bank or its Applicable Lending Office to perform its obligations hereunder to make, fund or maintain Eurodollar Rate Advances hereunder, the right of the Company to select Advances of such Type from such Notifying Bank for such Borrowing or any subsequent Borrowing shall be suspended until such Notifying Bank shall notify the Administrative Agent that the circumstances causing such suspension no longer exist; provided that during the period when such obligation of such Notifying Bank is suspended, any Borrowing consisting of Eurodollar Rate Advances shall not exceed the Commitments of the applicable Class of the other Banks less the aggregate amount of any Advances (including Competitive Advances) of the applicable Class then outstanding, and shall be made by the other Banks pro rata according to their respective Commitments of the applicable Class.
SECTION 2.13. Payments and Computations . (a) Each
Borrower shall make each payment to be made by it hereunder from
a bank account of such Borrower located in the United States (in
the case of the Company) or Canada (in the case of a Canadian
Borrower) not later than 11:00 a.m. (New York City time) on the
day when due to the Administrative Agent at its address referred
to in Section 8.02 (or, in the case of payments by a Canadian
Borrower, to an account in Canada designated by the
Administrative Agent for such purpose) in same-day funds. The
Administrative Agent will promptly thereafter cause to be
distributed like funds to the Banks entitled thereto for the
account of their respective Applicable Lending Offices, in each
case to be applied in accordance with the terms of this
Agreement. All payments required to be made by any Borrower
hereunder (whether of principal, interest or otherwise) shall be
made (i) in the case of principal of or interest on any US
Advance, Eurodollar Rate Advance and Canadian Alternate Base Rate
Advance, in US Dollars, (ii) in the case of principal of or
interest on any other Canadian Advance, in Canadian Dollars,
(iii) in the case of fees, in US Dollars (or in the case of
Acceptance Fees, Canadian Dollars), (iv) in the case of payments
under Section 8.04(b) in respect of any Advance, in the currency
in which such Advance is denominated, (v) in the case of any
indemnification or expense reimbursement obligation, in US
Dollars or, if requested by a Canadian Bank with respect to any
such payment due to it, in Canadian Dollars, or (vi) in all other
cases, US Dollars.
(b) Subject to Section 8.19, all computations of interest based on the US Alternate Base Rate or Canadian Alternate Base Rate shall be made by the Administrative Agent on the basis of a year of 365 or 366 days, as the case may be, when determined by reference to the US Prime Rate or the US Base Rate, respectively, and on the basis of a year of 360 days at all other times; and all computations of fees and of interest based on the Eurodollar Rate or the Fixed Rate shall be made by the Administrative Agent on the basis of a year of 360 days, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest or fees are payable. Each determination by the Administrative Agent of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.
(c) Whenever any payment hereunder shall be stated to be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day, and such extension of time shall be included in the computation of payment of interest or fees, as the case may be; provided, however, that if such extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made in the next following calendar month, such payment shall be made on the next preceding Business Day.
(d) Unless the Administrative Agent shall have received notice from the Company prior to the date on which any payment is due to the Banks hereunder that the applicable Borrower will not make such payment in full, the Administrative Agent may assume that the applicable Borrower has made such payment in full to the Administrative Agent on such date and the Administrative Agent may, in reliance upon such assumption, cause to be distributed to each Bank on such due date an amount equal to the amount then due such Bank. If and to the extent the applicable Borrower shall not have so made such payment in full to the Administrative Agent, each Bank shall repay to the Administrative Agent forthwith on demand such amount distributed to such Bank together with interest thereon, for each day from the date such amount is distributed to such Bank until the date such Bank repays such amount to the Administrative Agent, at the Federal Funds Effective Rate (in the case of amounts payable in US Dollars) or at the Canadian Prime Rate plus 1% (in the case of amounts payable in Canadian Dollars).
(e) Each Bank shall maintain on its books a loan
account in the name of each Borrower in which shall be recorded
all Advances made by such Bank to such Borrower, the interest
rate, the currency and the maturity date of each such Advance and
all payments of principal and interest made by each Borrower with
respect to such Advances. The obligation of each Borrower to
repay the Advances made by each Bank and to pay interest thereon
shall be evidenced by the entries from time to time made in the
loan account of such Bank maintained pursuant to this
Section 2.13(e); provided that the failure to make an entry with
respect to an Advance shall not affect the obligations of any
Borrower hereunder with respect to such Advance. In case of any
dispute, action or proceeding relating to any Advance, the
entries in such loan account shall be prima facie evidence of the
amount of such Advance and of any amounts paid or payable with
respect thereto.
(f) The Administrative Agent shall maintain on its books a set of accounts in which shall be recorded all Advances made by the Banks to each Borrower, the interest rates, the currencies and maturity dates of such Advances and all payments of principal and interest made thereon. In case of any discrepancy between the entries in the Administrative Agent's books and the entries in any Bank's books, such Bank's records shall be considered correct, in the absence of manifest error.
SECTION 2.14. Taxes on Payments . (a) All payments made by each Borrower under this Agreement shall be made free and clear of, and without reduction for or on account of, any income, stamp, or other taxes, imposts, duties, charges, fees, deductions, or withholdings, imposed, levied, collected, withheld, or assessed by the United States of America or Canada (or by any political subdivision or taxing authority thereof or therein) as a result of (i) the introduction after the date hereof of any law, regulation, treaty, directive, or guideline (whether or not having the force of law), or (ii) any change after the date hereof in any law, regulation, treaty, directive, or guideline (whether or not having the force of law), or (iii) any change after the date hereof in the interpretation or application of any law, regulation, treaty, directive, or guideline (whether or not having the force of law), or (iv) any such taxes, imposts, duties, charges, fees, deductions, or withholdings being imposed, levied, collected, withheld, or assessed at a greater rate than the rate that would have been applicable had such an introduction or change not been made, but only to the extent of the increase in such rate ("Withholding Taxes"). If any Withholding Taxes are required to be withheld from any amounts payable to or for the account of any Bank hereunder, the amounts so payable to or for the account of such Bank shall be increased to the extent necessary to yield to such Bank (after payment of all Withholding Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts payable to or for the account of such Bank under this Agreement prior to such introduction or change. Whenever any Withholding Tax is payable by any Borrower, as promptly as possible thereafter, such Borrower shall send to the Administrative Agent, for the account of such Bank, a certified copy of an original official receipt showing payment thereof. If any Borrower fails to pay any Withholding Taxes when due to the appropriate taxing authority or fails to remit to the Administrative Agent, for the account of any Bank the required receipts or other required documentary evidence, such Borrower shall indemnify such Bank or the Administrative Agent for any incremental taxes, interest, or penalties (including any Withholding Taxes imposed or asserted on or attributable to amounts payable under this Section) that may become payable by such Bank or the Administrative Agent as a result of any such failure.
(b) At least four Business Days prior to the first
Borrowing or, if the first Borrowing does not occur within thirty
days after the date of execution of this Agreement, by the end of
such thirty-day period, each Bank (other than a Canadian Bank)
that is organized outside the United States agrees that it will
deliver to the Company and the Administrative Agent two duly
completed copies of United States Internal Revenue Service Form
1001 (or such other documentation or information as may, under
applicable United States Federal income tax statutes or
regulations, be required in order to claim an exemption or
reduction from United States income tax withholding by reason of
an applicable treaty with the United States, including, after
December 31, 2000, Internal Revenue Service Form W-8BEN, such
documentation or other information being hereafter referred to as
"Form 1001") or Form 4224 or such other documentation or
information as may, under applicable United States Federal income
tax statutes or regulations, be required in order to claim an
exemption from United States income tax withholding for income
that is effectively connected with the conduct of a trade or
business within the United States, including, after
December 31, 2000, Internal Revenue Service Form W-8ECI, such
documentation or other information being hereafter referred to as
"Form 4224"), as the case may be, in the case of a Bank claiming
exemption from US Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8, or any subsequent versions thereof or
successors thereto, including, after December 31, 2000, Internal
Revenue Service Form W-8BEN (and, if such Bank delivers a Form W-
8, a certificate representing that such Bank is not a bank for
purposes of Section 881(c) of the Code, is not a 10-percent
shareholder of the Borrower (within the meaning of
Section 871(h)(3)(B) of the Code) and is not a controlled foreign
corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), indicating in each case that
such Bank is either entitled to receive payments under this
Agreement without deduction or withholding of any United States
Federal income taxes or, as the case may be, is subject to such
limited deduction or withholding. Each Bank which delivers to
the Company and the Administrative Agent such forms pursuant to
the next preceding sentence further undertakes to deliver to the
Company and the Administrative Agent two further copies of such
forms or successor applicable form or certificate, as the case
may be, as and when the previous form filed by it hereunder shall
expire or shall become incomplete or inaccurate in any respect,
unless in any of such cases an event has occurred prior to the
date on which any such delivery would otherwise be required which
renders such form inapplicable.
(c) If at any time any Bank by reason of payment by any Borrower of any Withholding Taxes obtains a credit against, or return or reduction of, any tax payable by it, or any other currently realized tax benefit, which it would not have enjoyed but for such payment ("Tax Benefit"), such Bank shall thereupon pay to such Borrower the amount which such Bank shall certify to be the amount that after payment, will leave such Bank in the same economic position it would have been in had it received no such Tax Benefit ("Equalization Amount"); provided, however, that if such Bank shall subsequently determine that it has lost the benefit of all or a portion of such Tax Benefit, such Borrower shall promptly remit to such Bank the amount certified by such Bank to be the amount necessary to restore such Bank to the position it would have been in if no payment had been made pursuant to this Section 2.14(c); provided further, however, that if such Bank shall be prevented by applicable law from paying such Borrower all or any portion of the Equalization Amount owing to such Borrower such payment need not be made to the extent such Bank is so prevented and the amount not paid shall be credited to the extent lawful against future payment owing to such Bank; provided further, however, that the aggregate of all Equalization Amounts paid by any Bank to any Borrower shall in no event exceed the aggregate of all amounts paid by such Borrower to such Bank in respect of Withholding Taxes plus, in the case of a Tax Benefit that occurs by reason of a refund interest actually received from the relevant taxing authority with respect to such refund. A certificate submitted in good faith by any Bank pursuant to this Section 2.14(c) shall be deemed conclusive absent manifest error.
(d) In the event a Bank shall become aware that any Borrower is required to pay any additional amount to it pursuant to Section 2.14(a), such Bank shall promptly notify the Administrative Agent and the Company of such fact and shall use reasonable efforts, consistent with legal and regulatory restrictions, to change the jurisdiction of its Applicable Lending Office if the making of such change (i) would avoid the need for, or reduce the amount of, any such additional amounts that may thereafter accrue, (ii) would not, in the good faith determination of such Bank, be disadvantageous for regulatory or competitive reasons to such Bank, and (iii) would not require such Bank to incur any cost or forego any economic advantage for which the applicable Borrower shall not have agreed to reimburse and indemnify such Bank.
(e) Notwithstanding the foregoing provisions of this
Section 2.14, in the event any Bank grants a participation in any
Advance pursuant to Section 8.06, no Borrower shall be obligated
to pay any taxes, imposts, duties, charges, fees, deductions, or
withholdings to the extent that the aggregate amount thereof
exceeds the aggregate amount for which such Borrower would have
been obligated if such Bank had not granted such participation.
SECTION 2.15. Sharing of Payments, Etc. If any Bank
or Canadian Bank, as applicable, shall obtain any payment
(whether voluntary, involuntary, through the exercise of any
right of setoff or otherwise) on account of the Contract Advances
made, or Drafts accepted, by it (other than pursuant to Sections
2.10, 2.14, 2.16, 8.04, or 8.06 hereof) in excess of its ratable
share of payments on account of the Contract Advances or Drafts,
as applicable, obtained by all the Banks or Canadian Banks, as
applicable, then such Bank shall forthwith purchase from the
other Banks or Canadian Banks, as applicable, through the
Administrative Agent such participations in the Contract Advances
made, or Drafts accepted, by them as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with
each of them; provided, however, that, if all or any portion of
such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank or Canadian Bank, as
applicable, shall be rescinded, and such Bank shall repay to the
purchasing Bank the purchase price to the extent of such
recovery, together with an amount equal to such Bank's ratable
share (according to the proportion that (i) the amount of such
Bank's required repayment bears to (ii) the total amount so
recovered from the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the
total amount so recovered. Each Borrower agrees that any Bank or
Canadian Bank, as applicable, so purchasing a participation from
another Bank or Canadian Bank, as applicable, pursuant to this
Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of
setoff) with respect to such participation as fully as if such
Bank were the direct creditor of such Borrower in the amount of
such participation. Nothing herein shall require any payment
which will result in any adverse withholding tax consequence to
any Borrower in any jurisdiction.
SECTION 2.16. Removal of a Bank . The Company shall have the right, by giving at least 15 Business Days' prior notice in writing to the affected Bank and the Administrative Agent, at any time when no Event of Default and no event which with the passage of time or the giving of notice or both would become an Event of Default has occurred and is then continuing, to remove as a party hereto any Bank having a credit rating of C/D (or its equivalent) or lower by Thomson BankWatch, Inc. (or any successor thereto), such removal to be effective as of the date specified in such notice from the Company (a "Removal Date"), which date, for any Eurodollar Rate Contract Advance, shall be the last day of an Interest Period and, for any Competitive Advance or Acceptance, shall be the maturity date of such Competitive Advance or Acceptance; provided that no such Bank may be removed if it does not have a Commitment at the time. On any Removal Date, the Borrowers shall repay all the outstanding Advances of the affected Bank applicable to such Removal Date, together with all accrued interest, fees, and all other amounts owing hereunder to such Bank. Upon each such Removal Date and receipt of the related payment referred to above, the Commitment relating to the Advances so paid on such Removal Date, together with all unused Commitment, of such affected Bank shall terminate, and such Bank shall cease thereafter to constitute a Bank hereunder. The Company shall have the right to offer to one or more Banks the right to increase their Commitments up to, in the aggregate for all such increases, the Commitment of any Bank which is removed pursuant to the foregoing provisions of this Section 2.16 (such Commitment being herein called an "Unallocated Commitment") effective on the relevant Removal Date, it being understood that no Bank shall be obligated to increase its Commitment in response to any such offer. The Company shall also have the right to offer all or any portion of an Unallocated Commitment to one or more Eligible Assignees not parties hereto having a credit rating higher than C/D (or its equivalent) by Thomson BankWatch, Inc. (or any successor thereto), and, upon each such bank's acceptance of such offer and execution and delivery of an instrument agreeing to the terms and conditions hereof (including, without limitation, the provisions of Section 8.06 regarding Bank assignments), each such bank shall become a Bank hereunder with a Commitment in an amount specified in such instrument. The obligations of the Borrowers described in Sections 2.10, 8.04, and 8.15 shall survive for the benefit of any Bank removed pursuant to this Sections 2.16, notwithstanding such removal.
SECTION 2.17. Canadian Borrowers; Canadian Commitments
. (a) The Company may at any time designate one or more of its
wholly-owned Subsidiaries organized under the laws of Canada or
any jurisdiction therein as a Canadian Borrower in accordance
with this Section. Any such designation shall be made by written
notice to the Administrative Agent signed on behalf of the
Company and the Canadian Borrower designated therein and shall
contain an undertaking, in form reasonably satisfactory to the
Administrative Agent, on behalf of such Canadian Borrower to be
bound by the provisions of this Agreement applicable to such
Canadian Borrower. The Company also may at any time terminate
the designation of any Canadian Borrower as a Borrower hereunder
by written notice to the Administrative Agent; provided, however,
that any such termination shall not be made at a time when any
Canadian Advances to such Canadian Borrower are outstanding and,
in any event, shall not affect such Canadian Borrower's liability
for any of its Obligations hereunder.
(b) The Company may on each March 31, June 30, September 30 and December 31, by written notice to the Administrative Agent given not less than ten Business Days prior to the end of the applicable quarter, allocate or reallocate the Commitments of Canadian Banks hereunder and, if applicable, the Designated Bank Affiliates, between US Commitments and Canadian Commitments of Canadian Schedule I Banks or Canadian Schedule II Banks and their Designated Bank Affiliates, as the case may be; provided, however, that (i) the sum of any US Commitment and Canadian Commitment of any Canadian Schedule I Bank, or the sum of the Canadian Commitment of any Canadian Schedule II Bank and US Commitment of its Designated Bank Affiliate, shall not at any time exceed its Commitment, (ii) the aggregate amount of the Canadian Commitments shall not at any time exceed the Maximum Canadian Allocation Amount and (iii) after giving effect to any such allocation or reallocation (A) the Canadian Exposure shall not exceed the Canadian Commitments, (B) the aggregate principal amount of outstanding US Advances shall not exceed the US Commitments, (C) the Assigned Dollar Value of the aggregate principal amount of outstanding Canadian Contract Advances of any Canadian Bank shall not exceed its Canadian Commitment and (D) the aggregate principal amount of outstanding US Contract Advances of any Canadian Schedule I Bank or of any Designated Bank Affiliate shall not exceed its US Commitment. Allocations and reallocations of Commitments of Canadian Schedule I Banks and Canadian Schedule II Banks and their Designated Bank Affiliates pursuant to this Section shall be made ratably among the Canadian Banks in accordance with their respective Maximum Canadian Commitment Amounts.
(c) The Administrative Agent shall notify the Banks of any designation by the Company of a Canadian Borrower or termination of such designation, or any allocation or reallocation of Commitments of Canadian Banks, promptly following receipt of notice thereof from the Company.
SECTION 2.18. Canadian Banker's Acceptances . All Acceptances and Acceptance Borrowings shall be made as provided in Annex I and the Canadian Banks and Canadian Borrowers hereby agree to be bound by the terms of Annex I. Annex I is incorporated herein by reference and forms a part of this Agreement.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Closing . The
amendment and restatement of the Original Credit Agreement shall
not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with
Section 8.01):
(a) The Administrative Agent (or its counsel) shall have received from the Borrower, ACC, the Guarantor and Banks constituting the Majority Banks either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received (i) (A) a copy of the certificate of incorporation, including all amendments thereto, of each of the Guarantor, the Company and ACC, certified as of a recent date by the Secretary of State of the state of its jurisdiction of organization, in the case of the Guarantor and the Company, and the Registrar of Companies of the Province of Alberta, in the case of ACC, and (B) a certificate as to the good standings of each of the Guarantor and the Company as of a recent date, from such Secretary of State and a certificate as to the status of ACC as of a recent date, from such Registrar; and (ii) a certificate of the Secretary or Assistant Secretary of each of the Guarantor, the Company and ACC dated the Restatement Date and certifying (A) that attached thereto is a true and complete copy of the By-laws of the Guarantor, the Company and ACC, as the case may be, as in effect on the Restatement Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors or the Executive Board of Directors of the Guarantor, the Company and ACC, as the case may be, authorizing the execution, delivery, and performance of this Agreement, (C) that the certificate of incorporation of each of the Guarantor, the Company and ACC, as the case may be, has not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (i) above and (D) as to the incumbency and specimen signature of each officer executing this Agreement or any other document delivered in connection herewith on behalf of the Guarantor, the Company and ACC, as the case may be.
(c) The Administrative Agent shall have received a favorable opinion of the General Counsel or General Attorney of the Guarantor, to the effect that:
(i) the Guarantor is validly existing and in good standing under the laws of the State of Delaware;
(ii) the Guarantor 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 has been duly authorized, executed and delivered by the Guarantor;
(iv) the execution, delivery and performance by the Guarantor of this Agreement will not conflict with the restated certificate of incorporation or bylaws of the Guarantor, each as in effect on the date of such opinion;
(v) the execution, delivery and performance of
this Agreement will not (x) contravene any applicable
provision of any applicable law or applicable order or
(y) violate 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 Guarantor or affecting its property;
(vi) 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 Guarantor of this Agreement; and
(vii) 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 Guarantor 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 Guarantor shall opine only as to the 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 or she has relied on certificates of state officials as to qualification to do business and good standing, certificates of officers of each of the Guarantor and the Company and other sources believed by him or her to be responsible.
(d) The Administrative Agent shall have received a favorable opinion of Andrews & Kurth L.L.P., special New York counsel to the Guarantor, to the effect that:
(i) this Agreement constitutes a valid and binding agreement of the Guarantor, 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; and
(ii) no authorization, consent or approval of any governmental body or agency of the State of New York or the United States of America which has not been obtained is required in connection with the execution, delivery and performance by the Guarantor of this Agreement.
(e) The Administrative Agent shall have received a certificate of a responsible officer of each of the Guarantor and the Company to the effect that:
(i) the representations and warranties contained
in Article IV 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 Guarantor and the Company are in compliance with all of the terms, covenants and conditions of this Agreement which are binding upon it.
(f) The Administrative Agent for the benefit of the Banks shall have received all interest, Facilities Fees and other fees accrued and unpaid under the Original Credit Agreement to (but excluding) the Restatement Date.
(g) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Restatement Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Company hereunder.
Upon the effectiveness of this Agreement:
(a) the Original Credit Agreement (including all Exhibits and Schedules thereto) shall be amended and restated to read in its entirety as set forth herein; and
(b) as used in the Loan Papers, the term "Credit Agreement" shall, unless the context otherwise requires, mean this Agreement as amended and restated herein;
provided, however, that the execution, delivery and effectiveness of this Agreement shall not affect the obligations accrued in respect to any principal, interest, fees or other amounts under the Original Credit Agreement.
The Administrative Agent shall promptly notify the Guarantor and the Banks of the occurrence of the Restatement Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the amendments to the Original Credit Agreement that would be effected hereby shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 8.01) at or prior to 3:00 p.m., New York City time, on October 31, 2000 (and, in the event such conditions are not so satisfied or waived, the Original Credit Agreement shall continue to remain in full force and effect without giving effect to any amendments thereto contemplated hereby).
SECTION 3.02. Conditions Precedent to Each Borrowing . The obligation of each Bank to make an Advance in connection with any Borrowing (including without limitation, any Borrowing on or after the Restatement Date) shall be subject to the further conditions precedent that on the date of such Borrowing,
(a) Administrative Agent shall have received a Notice of Contract Borrowing or Notice of Competitive Borrowing (or, in the case of a Canadian Borrowing comprised of Acceptances, a Notice of Drawing), executed and completed by a Financial Officer, and
(b) the following statements shall be true (and each of the giving of the applicable Notice of Contract Borrowing or Notice of Competitive Borrowing (or, in the case of a Canadian Borrowing comprised of Acceptances, a Notice of Drawing) and the acceptance by the applicable Borrower of the proceeds of such Borrowing shall constitute a representation and warranty by the Company and Guarantor that on the date of such Borrowing such statements are true):
(i) the representations and warranties contained in Article IV are true and correct on and as of the date of such Borrowing, before and after giving effect to such Borrowing and to the application of the proceeds therefrom, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date); and
(ii) no event has occurred and is continuing, or would result from such Borrowing or from the application of the proceeds therefrom, which constitutes an Event of Default.
SECTION 3.03. Conditions Precedent to Canadian Borrowings . The obligation of each Canadian Bank to make a Canadian Advance to any Canadian Borrower shall be subject to the further conditions precedent that (a) such Canadian Borrower shall have become a Canadian Borrower in accordance with Section 2.17 and shall not have ceased to be a Canadian Borrower and (b) in the case of the initial Canadian Advance to any Canadian Borrower, the Administrative Agent shall have received a certificate of status of such Canadian Borrower, a certified copy of authorizing resolutions of such Canadian Borrower, a certificate of incumbency of such Canadian Borrower, the constating document of such Canadian Borrower and such other documents, certifications and opinions as the Administrative Agent or its counsel may reasonably request relating to the organization and existence of such Canadian Borrower, the authorization of the Transactions to be entered into by it and the validity and binding effect of this Agreement upon such Canadian Borrower, all in form and substance satisfactory to the Administrative Agent and its counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties by the Company . The Company represents and warrants as follows:
(a) Each Borrower is a corporation duly organized, validly existing and, in the case of the Company, in good standing under the laws of the jurisdiction in which it is organized.
(b) The Transactions are within each Borrower's corporate powers, have been duly authorized by all necessary corporate action, and do not contravene (i) such Borrower's charter or by-laws or (ii) any law or any contractual restriction binding on or affecting any Borrower.
(c) No authorization or approval or other action by, and no notice to or filing with, any governmental authority, regulatory body, or other Person is required for the due execution, delivery and performance by the Company of this Agreement or the consummation by any Borrower of the Transactions, except such as have been duly obtained or made and are in full force and effect.
(d) This Agreement is the legal, valid and binding obligation of each Borrower enforceable against such Borrower in accordance with its terms.
SECTION 4.02. Representations and Warranties by the Guarantor . The Guarantor represents and warrants as follows:
(a) The Guarantor (i) has been duly incorporated and is validly existing and in good standing under the laws of the State of Delaware and (ii) 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 Guarantor and its Subsidiaries taken as a whole.
(b) This Agreement has been duly authorized, executed and delivered by the Guarantor and constitutes a valid and binding agreement of the Guarantor, 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.
(c) The execution, delivery and performance of this
Agreement will not conflict with any provision of (i) the
restated certificate of incorporation or bylaws of the Guarantor
or (ii) any indenture, loan agreement or other similar agreement
or instrument binding on the Guarantor.
(d) 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 Guarantor.
(e) To the knowledge of the Guarantor, there is no proceeding pending or threatened before any court or administrative agency which, in the opinion of the Guarantor, will result in a final determination which would have the effect of preventing the Guarantor from carrying on its business or from meeting its current and anticipated obligations on a timely basis.
(f) The consolidated balance sheets of the Guarantor 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 Guarantor 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. The consolidated balance sheet of the Guarantor and its Subsidiaries as of June 30, 2000, and the related consolidated statements of income, stockholders' equity and cash flows for the fiscal quarter then ended, fairly present the financial condition of the Guarantor and its Subsidiaries as at such date and for the period then ended, in conformity with generally accepted accounting principles applied on a consistent basis (subject to year end audit adjustments). Since June 30, 2000, there has been no material adverse change in the consolidated financial position or results of operations of the Guarantor and its Subsidiaries which would have the effect of preventing the Guarantor from carrying on its business or from meeting its current and anticipated obligations on a timely basis.
ARTICLE V
COVENANTS
So long as any Advance shall remain unpaid or any Bank shall have any Commitment hereunder, the Guarantor will, unless the Majority Banks shall otherwise consent in writing:
(a) Reporting Requirements. The Guarantor will furnish to each Bank: (i) within 15 days after the Guarantor 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 Guarantor 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 Guarantor 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; (ii) within 60 days after the close of each of the first three quarters of each of the Guarantor's fiscal years a statement by a responsible officer of the Guarantor stating whether to the knowledge of the Guarantor 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; (iii) within 120 days after the close of each of the Guarantor's fiscal years a statement by a responsible officer of the Guarantor stating whether to the knowledge of the Guarantor 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; (iv) within five Business Days after the Guarantor 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 Guarantor stating the facts with respect thereto; and (v) such other information respecting the financial condition or operations of the Guarantor and its Subsidiaries as any Bank may from time to time reasonably request.
(b) Limitations on Sales and Leasebacks. The Guarantor will not itself, and will not permit any of its Subsidiaries to, enter into any arrangement with any bank, insurance company or other lender or investor (not including the Guarantor or any Subsidiary) or to which any such lender or investor is a party, providing for the leasing by the Guarantor or any of its Subsidiaries for a period, including renewals, in excess of three years, of any Principal Property 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 Guarantor or any of its Subsidiaries 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 "sale and leaseback transaction") unless either:
(i) the Guarantor 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 Advances; or
(ii) the Guarantor within 180 days after the sale or transfer shall have been made by the Guarantor or by one of its Subsidiaries, 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 Guarantor or such Subsidiary at the time of entering into such arrangement, to the retirement of Indebtedness of the Guarantor.
(c) Compliance with Indenture. The Guarantor will comply with the provisions of Sections 1004 and 1005 of the Public Indenture (a true and complete copy of which the Guarantor 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 Article V 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 Article V, (a) references in the Public Indenture to "the Securities" shall be deemed to refer to the obligations of the Guarantor to pay the Guarantied Obligations, (b) references in the Public Indenture to "the Trustee" shall be deemed to refer to the Administrative Agent, (c) references in the Public Indenture to "this Indenture" shall be deemed to refer to this Agreement and (d) references in the Public Indenture to "supplemental indentures" shall be deemed to refer to supplements to this Agreement.
(d) Limitation on Mortgages. The Guarantor will not, and will not permit any of its Subsidiaries to, 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 Guarantor 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) 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.
(g) Insurance. The Guarantor will, and will cause the Company and ACC to, 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.
(h) Use of Proceeds. The Guarantor will cause the Borrowers to use, the proceeds of Advances for general corporate purposes and to repurchase or refinance, from time to time, commercial paper issued by any of the Borrowers, and such proceeds 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 Guarantor.
ARTICLE VI
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur and be continuing:
(a) any Borrower shall fail to pay any principal of any Advance when the same becomes due and payable and such default shall continue for a period of three Business Days; or
(b) any Borrower shall fail to pay any interest on any Advance or any fee payable hereunder or under any agreement executed in connection herewith when the same becomes due and payable and such failure shall remain unremedied for ten days; or
(c) any representation or warranty made by the Company
or the Guarantor herein or by any Borrower (or any of its
officers) in connection with this Agreement (including, without
limitation, any representation or warranty deemed made by the
Company or the Guarantor at the time of any Advance pursuant to
Article III) shall prove to have been incorrect in any material
respect when made or deemed made; or
(d) the Company or the Guarantor shall fail to perform
or observe any other term, covenant, or agreement contained in
this Agreement on its part to be performed or observed if such
failure shall remain unremedied for 30 days after written notice
thereof shall have been given to the Company and the Guarantor by
the Administrative Agent or any Bank; or
(e) the Guarantor 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
Advances) 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 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; or
(f) (i) the Guarantor or any Borrower shall commence any case, proceeding, or other action, or make any filing (A) under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition, or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for it or for all or any substantial part of its assets, or the Guarantor or any Borrower shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Guarantor or any Borrower any case, proceeding or other action of a nature referred to in clause (i) above which (A) results in the entry of an order for relief or any such adjudication or appointment or (B) remains undismissed, undischarged, or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Guarantor or any Borrower any case, proceeding, or other action seeking issuance of a warrant of attachment, execution, distraint, or similar process against all or any substantial part of its assets which results in the entry of an order for any such relief which shall not have been vacated, discharged, or stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Guarantor or any Borrower shall take any action in furtherance of or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above; or
(v) the Guarantor or any Borrower shall generally
not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due;
(g) any "Event of Default" described in the Public
Indenture shall occur; or
(h) a Change of Control shall occur;
then, and in any such event, the Administrative Agent
(i) shall at the request, or may with the consent, of the Majority Banks, by notice to the Guarantor and the Company, declare the obligation of each Bank to make Advances to be terminated, whereupon the same shall forthwith terminate;
(ii) shall at the request, or may with the consent, of Banks owed at least 51% of the then aggregate unpaid principal amount of the Advances owing to Banks (based on the Assigned Dollar Values, in the case of Canadian Advances denominated in Canadian Dollars), by notice to the Guarantor and the Company, declare the Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith due and payable, whereupon the Advances, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest, notice of intention to accelerate, notice of acceleration, or further notice of any kind, all of which are hereby expressly waived by the Borrowers;
(iii) shall at the request, or may with the consent, of Banks owed at least 51% of the then aggregate unpaid principal amount of the Advances owing to Banks (based on the Assigned Dollar Values, in the case of Canadian Advances denominated in Canadian Dollars), require the Borrowers to deposit with the Canadian Sub-Agent cash collateral, in Canadian Dollars in an amount equal to the aggregate unmatured Acceptances then outstanding, to be held by the Canadian Sub-Agent as security for the repayment of such outstanding Acceptances, and the Borrowers hereby agree to make such deposits; and
(iv) shall at the request, or may with the consent, of the Majority Banks, exercise any and all other legal and equitable rights afforded by the Loan Papers, applicable law, or in equity, including, but not limited to, the right to bring suit or other proceedings for specific performance or otherwise in aid of any right granted to Administrative Agent or any Bank hereunder; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to the Company or any of its Subsidiaries or the Guarantor under the Federal Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada) or the Companies' Creditors Arrangement Act (Canada), (A) the obligation of each Bank to make Advances shall automatically be terminated and (B) the Advances, all such interest and all such amounts shall automatically become and be due and payable, without presentment, demand, protest, or any notice of any kind, all of which are hereby expressly waived by the Guarantor and the Borrowers.
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action . Each Bank hereby appoints and authorizes the Administrative Agent to take such action as administrative agent on its behalf and to exercise such powers under this Agreement as are delegated to the Administrative Agent by the terms hereof, together with such powers as are reasonably incidental thereto. As to any matters not expressly provided for by this Agreement (including, without limitation, enforcement or collection of the amounts due hereunder), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions of the Majority Banks, and such instructions shall be binding upon all Banks and all holders of Advances; provided, however, that the Administrative Agent shall not be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or applicable law. The Administrative Agent agrees to give to each Bank prompt notice of each notice given to it by the Company pursuant to the terms of this Agreement.
SECTION 7.02. Administrative Agent's Reliance, Etc. Neither 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 it or them under or in connection with this Agreement, except for its or their own gross negligence or wilful misconduct. Without limitation of the generality of the foregoing, the Administrative Agent:
(a) may consult with legal counsel (including counsel for the Company or the Guarantor), independent public accountants, and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts;
(ii) makes no warranty or representation to any Bank and shall not be responsible to any Bank for any statements, warranties, or representations made in or in connection with this Agreement;
(c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement on the part of any Borrower or to inspect the property (including the books and records) of any Borrower;
(d) shall not be responsible to any Bank for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other instrument or document furnished pursuant hereto; and
(e) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram
or cable) believed by it to be genuine and signed or sent by the
proper party or parties.
SECTION 7.03. Administrative Agent and Affiliates .
With respect to its Commitment, The Chase Manhattan Bank shall
have the same rights and powers under this Agreement as any other
Bank, and may exercise the same as though it were not the
Administrative Agent and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include The Chase Manhattan Bank
in its individual capacity. The Chase Manhattan Bank and its
affiliates may accept deposits from, lend money to, act as
trustee under indentures of, and generally engage in any kind of
business with, the Guarantor, any of its Subsidiaries and any
Person who may do business with or own securities of the
Guarantor or any such Subsidiary, all as if The Chase Manhattan
Bank were not the Administrative Agent and without any duty to
account therefor to the Banks.
SECTION 7.04. Bank Credit Decision . Each 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 Article IV and such other documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each 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 this Agreement.
SECTION 7.05. Indemnification . The Banks agree to indemnify the Administrative Agent, acting in its agency capacity, (to the extent not reimbursed by the Borrowers), ratably as computed as set forth below from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Administrative Agent in any way relating to, or arising out of, this Agreement or any action taken or omitted by the Administrative Agent under this Agreement; provided that no Bank shall be liable to the Administrative Agent for any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's gross negligence or wilful misconduct. Without limitation of the foregoing, each Bank agrees to reimburse the Administrative Agent promptly upon demand for its ratable share of any out-of-pocket expenses (including counsel fees) incurred by the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings, or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, to the extent that the Administrative Agent is not reimbursed for such expenses by the Borrowers. For purposes of this Section 7.05, ratable allocations among the Banks shall be made (i) in respect of any demand by the Administrative Agent prior to termination of the Commitments, according to the respective amounts of their Commitments and (iii) thereafter according to the respective principal amounts of the Advances then outstanding to them.
SECTION 7.06. Successor Administrative Agent . The Administrative Agent may resign at any time by giving written notice thereof to the Banks, the Guarantor and the Company and may be removed at any time with or without cause by the Majority Banks. Upon any such resignation or removal, the Majority Banks shall have the right to appoint a successor Administrative Agent with the consent of the Guarantor and the Company (which consent shall not be required if at the time of such appointment any Event of Default or an event which with the passage of time or the giving of notice or both would become an Event of Default has occurred and is continuing). If no successor Administrative Agent shall have been so appointed by the Majority Banks, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Banks' removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Banks, appoint a successor Administrative Agent, which shall be a commercial bank organized or licensed under the laws of the United States of America or of any state thereof and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Article VII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
SECTION 7.07. Canadian Sub-Agent . The Administrative Agent may appoint a sub-agent to perform the duties and responsibilities of the Administrative Agent with respect to Canadian Advances. Any such sub-agent so appointed shall be entitled to all of the benefits and immunities of the Administrative Agent under this Agreement, including those granted under this Article VII, in its capacity as such. The Administrative Agent hereby appoints The Chase Manhattan Bank of Canada as the initial sub-agent of the Administrative Agent pursuant to this Section.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc . No amendment or
waiver of any provision of this Agreement nor consent to any
departure by the Guarantor or any Borrower 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
specific purpose for which given; provided, however, that no
amendment, waiver, or consent shall, unless in writing and signed
by all the Banks, do any of the following: (a) waive any of the
conditions specified in Section 3.01 or 3.02 (if and to the
extent that the Borrowing which is the subject of such waiver
would involve an increase in the aggregate outstanding amount of
Advances over the aggregate amount of Advances outstanding
immediately prior to such Borrowing), (b) increase, or extend the
scheduled termination of, the Commitments of the Banks or subject
the Banks to any additional obligations, (c) reduce the principal
of, or interest on, or change the currency of payment of, the
Advances or any fees or other amounts payable hereunder, (d)
postpone any date fixed for any payment of principal of, or
interest on, the Advances or any fees or other amounts payable
hereunder, (e) make any change which would alter the percentage
of the Commitment, or of the aggregate unpaid principal amount of
the Advances, or the number of Banks, which shall otherwise be
required for the Banks or any of them to take any action
hereunder, (f) release the Anadarko Guaranty, or (g) amend this
Section 8.01, and; provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Administrative
Agent in addition to the Banks required above to take such
action, affect the rights or duties of the Administrative Agent
under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other
communications provided for hereunder shall be in writing
(including telecopy, telegraphic or cable communication) and
telecopied, mailed, telegraphed, cabled or delivered, if to the
Company, at its address at P.O. Box 7, 801 Cherry Street, Fort
Worth, Texas 76101; if to any Canadian Borrower, to it in care of
the Company; if to the Guarantor, to it at 1200 Timberloch Place,
The Woodlands, Texas 77380, Attention: Treasurer; if to any Bank
listed on Schedule I hereto, at its Notice Address specified
opposite its name on Schedule I hereto; if to any other Bank, at
its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Bank; if to the
Administrative Agent, to The Chase Manhattan Bank, Loan and
Agency Services Group, One Chase Manhattan Plaza, 8th Floor, New
York, New York 10081, Attention: Muniram Appanna (Telecopy No.
(212) 552-5777) and (in the case of Competitive Advances) Chris
Consomer (Telecopy No. (212) 552-5627) and, in all cases, to The
Chase Manhattan Bank, P.O. Box 660197, Dallas, Texas 75266-0197,
Attention: Alana Rahn (Telecopy No. (214) 270-3897); if to the
Canadian Sub-Agent (in the case of notices relating to Canadian
Advances), to The Chase Manhattan Bank of Canada, 100 King Street
West, Suite 6900, Toronto, Ontario, Canada M5X1A4, Attention:
Funding Officer (Telecopy No. (416) 216-4162); or, as to the
Company, the Guarantor, any Bank or the Administrative Agent, at
such other address as shall be designated by such party in a
written notice to the other parties and, as to each other party,
at such other address as shall be designated by such party in a
written notice to the Guarantor, the Company and the
Administrative Agent. All such notices and communications shall,
when telecopied, mailed, telegraphed, or cabled, be effective
when sent by telecopy, deposited in the mails, delivered to the
telegraph company, or delivered to the cable company,
respectively, except that notices and communications to the
Administrative Agent pursuant to Article II or VII shall not be
effective until received by the Administrative Agent. The
Administrative Agent shall be entitled to rely on any oral notice
made pursuant to Section 2.03(a)(v) believed by it to be genuine
and made by the proper party or parties, and the Borrowers and
the Banks, as the case may be, agree to be conclusively bound by
the Administrative Agent's records in respect of any such notice.
SECTION 8.03. No Waiver; Remedies . No failure on the part of any Bank or the Administrative Agent to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs, Expenses and Taxes . (a) The Company agrees to pay on demand all costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, administration, modification, and amendment of this Agreement, the Loan Papers, and the other documents to be delivered hereunder, including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and with respect to advising the Administrative Agent as to its rights and responsibilities under this Agreement, and all costs and expenses, if any, (including, without limitation, reasonable counsel fees and expenses), incurred by the Administrative Agent or any Bank in connection with the enforcement (whether through negotiations, legal proceedings or otherwise) of this Agreement and the other documents to be delivered hereunder. In addition, the Company agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges, or similar levies which arise from the execution and delivery of this Agreement and agrees to save the Administrative Agent and each Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes.
(b) If any payment of principal of any Eurodollar Rate Contract Advance, or Competitive Advance is made by any Borrower to or for the account of a Bank, other than on the last day of the Interest Period for such Contract Advance, or on the maturity date of such Competitive Advance, as the case may be, or as a result of a payment pursuant to Section 2.07, or as a result of acceleration of the maturity of the Advances pursuant to Article VI, or for any other reason, or by an Eligible Assignee to a Bank, other than on the last day of the Interest Period (or the final maturity date in the case of a Competitive Advance) for such Advance upon an assignment of rights and obligations under this Agreement pursuant to Section 8.06 as a result of the exercise by the Company of its rights pursuant to Section 8.07, or an assignment of rights and obligations under this Agreement pursuant to Section 2.16 as a result of a demand by the Company, or if the Company fails to convert or continue any Contract Advance hereunder after irrevocable notice of such conversion or continuation has been given pursuant to Section 2.04, the Borrower in respect of such Advance shall, upon demand by such Bank (with a copy of such demand to the Administrative Agent), pay to the Administrative Agent for the account of such Bank any amounts required to compensate such Bank for any additional losses, costs or expenses which it may reasonably incur as a result of such payment or failure, including, without limitation, any loss (excluding loss of anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Bank to fund or maintain such Advance. A certificate of such Bank setting forth the amount demanded hereunder and the basis therefor shall, in the absence of manifest error, be conclusive and binding for all purposes.
SECTION 8.05. Intentionally Omitted.
SECTION 8.06. Binding Effect and Assignment . This Agreement shall be binding upon and inure to the benefit of the Company and the Guarantor, the Canadian Borrowers and the Banks and their respective successors and assigns, except that none of the Company, the Guarantor nor any Canadian Borrower may 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 Guarantor, provided, however, that each Bank may at any time grant participations in its Loans and its Commitments ("Participations") to other Persons (such Persons being herein called "Participants"). The Company and the Guarantor agree that each Participant shall be deemed to be a "Bank" for purposes of Sections 2.10, 2.14 and 8.04(b) with respect to its Participations outstanding from time to time. Each Bank agrees with the Company and the Guarantor 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 or the Guarantor. The creation of a Participation shall not give any Participant any rights under this Agreement 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 8.07. Termination and Substitution of Bank.
(a) If the obligation of any Bank to make, convert Loans into or
continue Eurodollar Loans has been suspended pursuant to Section
2.12, (ii) any Bank has demanded compensation under Section 2.10
or 2.14, the Company may, upon three Business Days' notice to
such Bank through the Administrative Agent, prepay in full all of
the outstanding Advances 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 becomes a Defaulting Bank, the Company may, in its sole discretion and without prejudice to any right or remedy that the Company or the Guarantor 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 8.04(b) shall not apply to any such prepayment.
(c) If the Company terminates this Agreement with respect to any Bank under this Section 8.07, the Company shall use its best efforts, with the assistance of the Administrative Agent, to seek an Eligible Assignee to assume the Commitment of such relevant Bank.
(d) Notwithstanding the foregoing, the Administrative Agent, the Canadian Sub-Agent, the Banks and the Borrowers acknowledge that The Toronto-Dominion Bank has granted or may grant an unfunded participation in respect of a portion of its Canadian Commitment in favor of The Chase Manhattan Bank and that so long as such participation remains in effect, The Chase Manhattan Bank shall be treated as a Bank for purposes of (and solely for purposes of) voting on all matters requiring the approval of the Banks or the Majority Banks, as the case may be, under this Agreement and the other Loan Papers, and shall be entitled to receive any information that a Bank is entitled to receive under this Agreement.
SECTION 8.08. GOVERNING LAW . THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 8.09. Exceptions to Covenants . Neither the Guarantor or the Company may take or fail to take any action that is permitted as an exception to any of the covenants contained in any Loan Paper if that action or omission would result in the breach of any other covenant contained in any Loan Paper.
SECTION 8.10. Survival . All covenants, agreements,
undertakings, representations and warranties made in any of the
Loan Papers survive all closings under the Loan Papers until
payment in full of the Obligation and termination of this
Agreement, except that Sections 2.10, 2.11, 2.14, 7.05, 8.04 and
8.15 (together with any other provisions in the Loan Papers which
expressly provides that it shall survive termination of this
Agreement) shall survive termination of this Agreement; and such
covenants, agreements, undertakings, representations and
warranties, except as otherwise indicated, are not affected by
any investigation made by any party.
SECTION 8.11. Invalid Provisions . Any provision in any Loan Paper held to be illegal, invalid, or unenforceable is fully severable; the appropriate Loan Paper shall be construed and enforced as if that provision had never been included; and the remaining provisions shall remain in full force and effect and shall not be affected by the severed provision. Administrative Agent, Banks and the Borrower or Borrowers party to the affected Loan Paper agree to negotiate in good faith the terms of a replacement provision as similar to the severed provision as may be possible and be legal, valid and enforceable.
SECTION 8.12. Maximum Rate . Regardless of any provision contained in any Loan Paper, no Bank shall ever be entitled to contract for, charge, take, reserve, receive or apply as interest on the Obligation, or any part thereof, any amount in excess of the Maximum Rate, and, if Banks ever do so, then any excess shall be deemed a partial prepayment of principal and treated hereunder as such and any remaining excess shall be refunded to the applicable Borrower or Borrowers. In determining if the interest paid or payable exceeds the Maximum Rate, the Borrowers and Banks shall, to the maximum extent permitted under applicable law, (a) treat all Borrowings as but a single extension of credit (and Banks and the Borrowers agree that such is the case and that provision herein for multiple Borrowings is for convenience only), (b) characterize any nonprincipal payment as an expense, fee, or premium rather than as interest, (c) exclude voluntary prepayments and the effects thereof, and (d) amortize, prorate, allocate, and spread the total amount of interest throughout the entire contemplated term of the Obligation; provided that if the Obligation is paid and performed in full prior to the end of the full contemplated term thereof, and if the interest received for its actual period of existence thereof exceeds the Maximum Amount, Banks shall refund any excess (and Banks shall not, to the extent permitted by law, be subject to any penalties provided by any laws for contracting for, charging, taking, reserving, or receiving interest in excess of the Maximum Amount).
SECTION 8.13. 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 8.14. Not in Control . Nothing in any Loan Paper gives or may be deemed to give to Administrative Agent or any Bank the right to exercise control over the Guarantor, the Company or any of their respective Subsidiaries' property, other assets, affairs or management or to preclude or interfere with the Guarantor, the Company or any of their respective Subsidiaries' compliance with any law or require any act or omission by the Guarantor, the Company or any such Subsidiary that may be harmful to Persons or property. Any materiality or substantiality qualifier of any representation, warranty, covenant, agreement or other provision of any Loan Paper is included for credit documentation purposes only and does not imply, and shall not be deemed to mean, that Administrative Agent or any Bank acquiesces in any noncompliance by the Guarantor, the Company or any of their respective Subsidiaries with any law, document, or otherwise or does not expect the Guarantor, the Company or any of their respective Subsidiaries to promptly, diligently and continuously carry out all appropriate removal, remediation, compliance, closure or other activities required or appropriate in accordance with all Environmental Laws.
SECTION 8.15. INDEMNIFICATION . THE COMPANY SHALL INDEMNIFY, PROTECT, AND HOLD THE ADMINISTRATIVE AGENT, CHASE SECURITIES INC., EACH BANK, AND THEIR RESPECTIVE AFFILIATES, PARENTS, AND SUBSIDIARIES, AND EACH OF THE FOREGOING PARTIES' RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS, ASSIGNS, AND ATTORNEYS (COLLECTIVELY, THE "INDEMNIFIED PARTIES") HARMLESS FROM AND AGAINST ANY AND ALL PRESENT AND FUTURE, KNOWN AND UNKNOWN, FIXED AND CONTINGENT, LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, AND PROCEEDINGS AND ALL REASONABLE AND NECESSARY COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL REASONABLE ATTORNEYS' FEES AND LEGAL EXPENSES, AND AMOUNTS PAID IN SETTLEMENT WHETHER OR NOT SUIT IS BROUGHT), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (THE "INDEMNIFIED LIABILITIES") WHICH MAY AT ANY TIME BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE INDEMNIFIED PARTIES, IN ANY WAY RELATING TO OR ARISING OUT OF (A) ANY LOAN PAPERS OR TRANSACTION CONTEMPLATED BY ANY LOAN PAPER (INCLUDING, WITHOUT LIMITATION, THE ACQUISITION), OR (B) ANY INDEMNIFIED PARTY'S SOLE OR CONCURRENT ORDINARY NEGLIGENCE ARISING IN CONNECTION WITH ANY LOAN PAPER OR ANY TRANSACTION CONTEMPLATED BY ANY LOAN PAPER, TO THE EXTENT THAT ANY OF THE INDEMNIFIED LIABILITIES AS TO ANY INDEMNIFIED PARTY RESULTS, DIRECTLY OR INDIRECTLY, FROM ANY CLAIM MADE, OR ACTION, SUIT, OR PROCEEDING COMMENCED BY OR ON BEHALF OF ANY PERSON OTHER THAN BY SUCH INDEMNIFIED PARTY; PROVIDED THAT, THE COMPANY SHALL HAVE NO OBLIGATION HEREUNDER TO ANY INDEMNIFIED PARTY WITH RESPECT TO ANY INDEMNIFIED LIABILITY ARISING FROM THE FRAUD, GROSS NEGLIGENCE, WILFUL MISCONDUCT, OR UNLAWFUL ACTS OF SUCH INDEMNIFIED PARTY OR ANY ASSOCIATED PERSON OF SUCH INDEMNIFIED PARTY. AS USED IN THIS PARAGRAPH, THE TERM "ASSOCIATED PERSON" MEANS, WITH RESPECT TO ANY PERSON, THE AFFILIATES, PARENTS, SUBSIDIARIES, DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS, ASSIGNS, AND ATTORNEYS OF SUCH PERSON, OR OF ANOTHER PERSON OF WHICH SUCH PERSON IS ALSO AN ASSOCIATED PERSON. THE PROVISIONS OF AND UNDERTAKINGS AND INDEMNIFICATION SET FORTH IN THIS SECTION SHALL SURVIVE THE SATISFACTION AND PAYMENT OF THE OBLIGATION AND TERMINATION OF THIS AGREEMENT. THE COMPANY MAY, AT ITS OWN COST AND EXPENSE, PARTICIPATE IN THE DEFENSE IN ANY PROCEEDING INVOLVING ANY INDEMNIFIED LIABILITY. IF NO EVENT OF DEFAULT EXISTS, THE COMPANY MAY ASSUME THE DEFENSE IN THAT PROCEEDING ON BEHALF OF THE APPLICABLE INDEMNIFIED PARTIES, INCLUDING THE EMPLOYMENT OF COUNSEL IF FIRST APPROVED (WHICH APPROVAL MAY NOT BE UNREASONABLY WITHHELD) BY THE APPLICABLE INDEMNIFIED PARTIES. IF THE COMPANY ASSUMES ANY DEFENSE, IT SHALL KEEP THE APPLICABLE INDEMNIFIED PARTIES FULLY ADVISED OF THE STATUS OF, AND SHALL CONSULT WITH THOSE INDEMNIFIED PARTIES BEFORE TAKING ANY MATERIAL POSITION IN RESPECT OF, THAT PROCEEDING. IF THE COMPANY CONSENTS OR IF ANY INDEMNIFIED PARTY REASONABLY DETERMINES THAT AN ACTUAL CONFLICT OF INTEREST EXISTS BETWEEN THE COMPANY AND THAT INDEMNIFIED PARTY WITH RESPECT TO THE SUBJECT MATTER OF THE PROCEEDING OR THAT THE COMPANY IS NOT DILIGENTLY PURSUING THE DEFENSE, THEN (I) THAT INDEMNIFIED PARTY MAY, AT THE COMPANY'S EXPENSE, EMPLOY COUNSEL TO REPRESENT INDEMNIFIED PARTY THAT IS SEPARATE FROM COUNSEL FOR THE COMPANY OR ANY OTHER PERSON IN THAT PROCEEDING AND (II) THE COMPANY IS NO LONGER ENTITLED TO ASSUME THE DEFENSE ON BEHALF OF THAT INDEMNIFIED PARTY. THE COMPANY MAY NOT AGREE TO THE SETTLEMENT OF ANY INDEMNIFIED LIABILITY WITHOUT THE PRIOR WRITTEN CONSENT OF THE APPLICABLE INDEMNIFIED PARTIES UNLESS THAT SETTLEMENT FULLY RELIEVES THOSE INDEMNIFIED PARTIES OF ANY LIABILITY WHATSOEVER FOR THAT INDEMNIFIED LIABILITY.
SECTION 8.16. ENTIRETY . THE LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE BORROWERS, THE GUARANTOR, BANKS AND ADMINISTRATIVE AGENT AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS BY SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN SUCH PARTIES.
SECTION 8.17. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.18. Conversion of Currencies . (a) If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum owing hereunder in one currency into another currency, each party hereto (including any Canadian Borrowers) agrees, to the fullest extent that it may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures in the relevant jurisdiction the first currency could be purchased with such other currency on the Business Day immediately preceding the day on which final judgment is given.
(b) The obligations of the Borrowers in respect of any sum due to any party hereto or any holder of the obligations owing hereunder (the "Applicable Creditor") shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than the currency in which such sum is stated to be due hereunder (the "Agreement Currency"), be discharged only to the extent that, on the Business Day following receipt by the Applicable Creditor of any sum adjudged to be so due in the Judgment Currency, the Applicable Creditor may in accordance with normal banking procedures in the relevant jurisdiction purchase the Agreement Currency with the Judgment Currency; if the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Creditor in the Agreement Currency, such the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Applicable Creditor against such loss. The obligations of each Borrower contained in this Section 8.18 shall survive the termination of this Agreement and the payment of all other amounts owing hereunder.
SECTION 8.19. Interest Act (Canada) . For purposes of the Interest Act (Canada) and disclosure thereunder, whenever interest to be paid with respect to Canadian Advances or fees relating thereto is to be calculated on the basis of a year of 360 days or any other period of time that is less than a calendar year, the yearly rate of interest to which the rate determined pursuant to such calculation is equivalent is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by either 360 or such other period of time, as the case may be.
SECTION 8.20. Termination of Guarantee Agreement . On the Restatement Date, each Company Guarantee shall be pro tanto terminated, released and of no further force and effect. However, unless and until such date occurs as provided herein, each Company Guarantee shall remain in full force and effect and shall not be affected by this Agreement.
ARTICLE IX
ANADARKO GUARANTY
SECTION 9.01. The Anadarko Guaranty .
(a) The Guarantor irrevocably and unconditionally guarantees to each Bank and the Administrative Agent and their respective successors and assigns, (i) the full and punctual payment of principal of and interest on each Advance when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Borrowers under this Agreement, and (ii) the full and punctual performance within applicable grace periods of all other obligations of the Borrowers under this Agreement (collectively, the "Guaranteed Obligations").
(b) The Guarantor further agrees that the Anadarko Guaranty constitutes a guarantee of payment, performance and compliance and not merely of collection.
(c) The obligations of the Guarantor to make any payment hereunder may be satisfied by causing the Company to make such payment.
(d) The Guarantor also agrees to pay any and all costs and expenses (including, without limitation, reasonable attorneys' fees incurred by the Administrative Agent or any Bank in enforcing any of their respective rights under the Anadarko Guaranty, laws or otherwise) of the Administrative Agent or any Bank against the Company or any other Person or against the Administrative Agent or any Bank for the payments in respect of any amounts to any Bank pursuant to the provisions of the Anadarko Guaranty.
(e) The Guarantor waives presentment to, demand of payment from and protest to the Company or any other Borrower of any of the Guaranteed Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. The obligations of the Guarantor hereunder shall not be affected by the failure of the Administrative Agent or any other Bank to assert any claim or demand or to enforce or exercise any right or remedy against the Company or any other Borrower under the provisions of the Credit Agreement, any other Loan Papers or otherwise.
(f) The obligations of the Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the payment in full in cash of all the Guaranteed Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Guaranteed Obligations, and shall not be subject to any defense (other than a defense of payment or performance), set- off, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Guaranteed Obligations or otherwise.
(g) The Guarantor waives any defense based on or arising out of any defense of the Company or any other Borrower or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Company or any other Borrower, other than the final payment in full in cash of all the Guaranteed Obligations.
SECTION 9.02. Subrogation . Anadarko shall be
subrogated to any of the rights (whether contractual, under
applicable laws or otherwise) of the Administrative Agent or any
Bank against the Company or any other Person or against any Bank
for the payments in respect of any amounts to any Bank pursuant
to the provisions of this Anadarko Guaranty; provided, however,
that the Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon, such right of
subrogation with the principal of and interest on all Advances
until all other Guarantied Obligations shall have been paid in
full and the Commitments terminated.
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.
UNION PACIFIC RESOURCES GROUP INC.
By:
Name:
Title:
ANADARKO CANADA CORPORATION
By:
Name:
Title:
ANADARKO PETROLEUM CORPORATION
By:
Name:
Title:
THE CHASE MANHATTAN BANK (the successor
by merger to Chase Bank of Texas, N.A.),
as Administrative Agent and as a Bank
By:
Name:
Title:
THE CHASE MANHATTAN BANK OF CANADA,
as Canadian Sub-Agent
By:
Name:
Title:
THE TORONTO-DOMINION BANK,
in respect of the participated Canadian
Commitment with The Chase Manhattan Bank
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By:
Name:
Title:
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON CANADA
By:
Name:
Title:
By:
Name:
Title:
BANK OF AMERICA, N.A.
By:
Name:
Title:
BANK OF AMERICA CANADA
By:
Name:
Title:
ROYAL BANK OF CANADA
By:
Name:
Title:
By:
Name:
Title:
BANK OF MONTREAL
By:
Name:
Title:
By:
Name:
Title:
DEUTSCHE BANK AG, NEW YORK AND/OR
CAYMAN ISLAND BRANCH
By:
Name:
Title:
By:
Name:
Title:
DEUTSCHE BANK CANADA
By:
Name:
Title:
By:
Name:
Title:
BANK ONE, N.A.
(Main Office - Chicago)
By:
Name:
Title:
BANK ONE, CANADA
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
Name:
Title:
THE TORONTO-DOMINION BANK
By:
Name:
Title:
ABN AMRO BANK, N.V.
By:
Name:
Title:
By:
Name:
Title:
ABN AMRO BANK CANADA
By:
Name:
Title:
By:
Name:
Title:
UBS AG
By:
Name:
Title:
By:
Name:
Title:
UBS BANK [CANADA]
By:
Name:
Title:
By:
Name:
Title:
THE BANK OF NEW YORK
By:
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
NEW YORK BRANCH
By:
Name:
Title:
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH
By:
Name:
Title:
By:
Name:
Title:
MELLON BANK, N.A.
By:
Name:
Title:
KBC BANK N.V.
By:
Name:
Title:
By:
Name:
Title:
THE NORTHERN TRUST COMPANY
By:
Name:
Title:
SUNTRUST BANK, ATLANTA
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
THE FROST NATIONAL BANK
By:
Name:
Title:
ANNEX I
BANKER'S ACCEPTANCES
(a) Interpretation. All references in this Annex to "this Agreement" refer to the Agreement to which this Annex is attached, including this Annex. All capitalized terms in this Annex have the meanings given to them in this Agreement, unless otherwise defined in this Annex. All references to "Sections" and "Articles" in this Annex are references to sections and articles of this Agreement, unless otherwise specified.
(b) General Provisions. Drafts issued by a Canadian Borrower on the occasion of any Acceptance Borrowing shall be in an aggregate face amount of not less than Canadian $10,000,000 or an integral multiple of Canadian $5,000,000 in excess thereof and, subject to the terms and conditions set forth in this Agreement, shall be accepted by the Canadian Banks ratably in accordance with their respective Canadian Commitments. For purposes of this Agreement, the full face value of an Acceptance, without discount, shall be used when calculations are made to determine the outstanding amount of any Acceptance or the Assigned Dollar Value thereof.
(c) Terms of Acceptance. Each Draft shall be accepted
and purchased by a Canadian Bank, upon the written request of the
applicable Canadian Borrower given in accordance with paragraph
(d) of this Annex, by the completion and acceptance by such
Canadian Bank of a Draft (i) payable in Canadian Dollars, drawn
by such Canadian Borrower on such Canadian Bank in accordance
with this Agreement, to the order of such Canadian Bank or, in
the case of depository bills within the meaning of the Depository
Bills and Notes Act (Canada), to the order of "CDS&Co.", and (ii)
maturing prior to the Termination Date on a Business Day that
occurs either 30, 60 or 90 days (or such other period as agreed
to by the Canadian Sub-Agent and the Canadian Banks)after the
date of such Draft, all as specified in the relevant Notice of
Drawing.
(d) Notice of Drawing and Discount of Acceptances.
(i) With respect to each requested acceptance of Drafts, the applicable Canadian Borrower shall give the Canadian Sub-Agent a notice (a "Notice of Drawing"), substantially in the form of Exhibit D hereto (which shall be irrevocable) to be received prior to 11:00 a.m. (Toronto time) at least two Business Days prior to the date of the requested acceptance, specifying:
(A) the date on which such Drafts are to be accepted;
(B) the aggregate face amount of such Drafts;
(C) the maturity date of such Drafts; and
(D) such additional information as the Canadian Sub-Agent or any Canadian Bank may from time to time reasonably request to be included in such notices.
(ii) Upon receipt of a Notice of Drawing the Canadian Sub-Agent shall promptly notify each Canadian Bank of the contents thereof and of such Canadian Bank's ratable share of the Acceptances requested thereunder. The aggregate face amount of the Drafts to be accepted by a Canadian Bank shall be determined by the Canadian Sub-Agent by reference to the respective Canadian Commitments of the Canadian Banks.
(iii) Not later than 10:00 a.m., Toronto time, on the date of the acceptance of a Draft, the Canadian Sub- Agent shall notify the applicable Canadian Borrower (or the Company, on its behalf) of the Applicable BA Discount Rate. Not later than 2:00 p.m., Toronto time, on such date each Canadian Bank shall, subject to the fulfillment of the applicable conditions precedent specified in Sections 3.02 and 3.03 and subject to the provisions of paragraph (f) of this Annex, (A) on the basis of the information supplied by the Canadian Sub-Agent, as aforesaid, complete a Draft or Drafts of such Canadian Borrower by filling in the amount, date and maturity date thereof in accordance with the applicable Notice of Drawing, (B) duly accept such Draft or Drafts, (C) discount the Acceptance or Acceptances created thereby, (D) give the Canadian Sub-Agent telegraphic or telex notice of such Canadian Bank's acceptance of such Draft or Drafts and of its discount thereof, confirming the amount paid to the Canadian Sub-Agent for the account of such Canadian Borrower and (E) remit to the Canadian Sub- Agent in Canadian Dollars in immediately available funds an amount equal to the BA Discount Proceeds of such Acceptance. Upon receipt by the Canadian Sub-Agent of such sums from the Canadian Banks, the Canadian Sub-Agent shall make the aggregate amount thereof available to the applicable Canadian Borrower. The Acceptance Fee with respect to any Acceptance accepted by any Canadian Bank shall be deducted from the BA Discount Proceeds payable by such Canadian Bank hereunder.
(iv) Each extension of credit hereunder through the acceptance of Drafts shall be made simultaneously and pro rata by the Canadian Banks in accordance with their respective Canadian Commitments; provided, however, that the failure of any Canadian Bank to accept any Drafts shall not relieve any other Canadian Bank of its obligation to accept Drafts hereunder (it being understood, however, that no Canadian Bank shall be responsible for the failure of any other Canadian Bank to accept any Drafts required to be accepted by such other Canadian Bank).
(e) Acceptance Obligation. Each Canadian Borrower is obligated, and hereby unconditionally agrees, to pay to each Canadian Bank the face amount of each Acceptance created by such Canadian Bank in accordance with a Notice of Drawing pursuant to paragraph (d) of this Annex on the maturity date thereof, or on such earlier date as may be required pursuant to provisions of this Agreement. With respect to each Acceptance which is outstanding hereunder, the applicable Canadian Borrower shall notify the Canadian Sub-Agent prior to 11:00 a.m. (Toronto time) three Business Days prior to the maturity date of such Acceptance (which notice shall be irrevocable) of such Canadian Borrower's intention to issue Acceptances on such maturity date to provide for the payment of such maturing Acceptance and shall deliver a Notice of Drawing to the Canadian Sub-Agent. Any repayment of an Acceptance must be made at or before 2:00 p.m. (Toronto time) on the maturity date of such Acceptance, it being understood that payments by any Canadian Borrowers and fundings by any Canadian Banks in respect of each maturing Acceptance and each new Acceptance shall be made on a net basis reflecting the difference between the face amount of the maturing Acceptance and the BA Discount Proceeds of the new Acceptance, less the applicable Acceptance Fee. If the applicable Canadian Borrower fails to give the foregoing notice, and if the subject Acceptance Obligation is not paid when due, the applicable Canadian Borrower shall irrevocably be deemed to have requested and to have been advanced a Canadian Prime Rate Contract Advance in the face amount of such maturing Acceptance on the maturity date of such Acceptance from the Canadian Bank which accepted such maturing Acceptance, which Canadian Prime Rate Contract Advance Acceptance shall bear interest, payable on demand, at a rate per annum equal to the Canadian Prime Rate in effect from time to time, from the due date thereof to the date of payment thereof. Each Canadian Borrower waives presentment for payment and any other defense to payment of any amounts due to a Canadian Bank in respect of any Acceptances accepted by such Canadian Bank under this Agreement which might exist solely by reason of those Acceptances being held, at the maturity thereof, by that Canadian Bank in its own right and each Canadian Borrower agrees not to claim any days of grace if that Canadian Bank, as holder, sues such Canadian Borrower on those Acceptances for payment of the amounts payable by such Canadian Borrower thereunder.
(f) Power of Attorney. Each Canadian Borrower hereby appoints each Canadian Bank as the attorney of the applicable Canadian Borrower to sign and endorse on behalf of such Canadian Borrower, in handwriting or by facsimile or mechanical signature as and when requested by the applicable Canadian Borrower, blank forms of Drafts conforming with the requirements of this Agreement and in form satisfactory to the applicable Canadian Bank. Each Canadian Borrower hereby recognizes and agrees that all Acceptances signed or endorsed or both on its behalf by a Canadian Bank shall bind the Canadian Borrower as fully and effectually as if signed in the handwriting of and duly issued by the proper signing officer of the applicable Canadian Borrower. Each Canadian Bank is hereby authorized to issue such Acceptances endorsed in blank in such face amounts as may be determined by such Canadian Bank provided that the aggregate amount thereof is equal to the aggregate amount of Acceptances required to be accepted by such Canadian Bank. No Canadian Bank shall be liable for any damage, loss or other claim arising by reason of any loss or improper use of any Acceptance except loss or improper use arising by reason of the gross negligence, wilful misconduct or unlawful conduct of such Canadian Bank, its officers, employees, agents or representatives. Each Canadian Bank shall maintain a record with respect to Acceptances (A) voided by it for any reason, (B) accepted by it hereunder, (C) purchased by it hereunder and (D) canceled at their respective maturities. Each Canadian Bank further agrees to retain such records in the manner and for the statutory periods provided in the various Canadian provincial or federal statutes and regulations which apply to such Canadian Bank.
(g) In case any authorized signatory of any Canadian Borrower whose signature shall appear on any Draft shall cease to have such authority before the acceptance of a Draft with respect to such Draft, the obligations of such Canadian Borrower hereunder and under such Acceptance shall nevertheless be valid for all purposes as if such authority had remained in force until such creation. The Canadian Sub-Agent and each Canadian Bank shall be fully protected in relying upon any instructions received from the Company or any Canadian Borrower (orally or otherwise) without any duty to make inquiry as to the genuineness of such instructions. The Canadian Sub-Agent and each Canadian Bank shall be entitled to rely on instructions received from any person identifying himself (orally or otherwise) as a duly authorized officer of the Company or any Canadian Borrower and shall not be liable for any errors, omissions, delays or interruptions in the transmission of such instructions, except for those arising by reason of the gross negligence, wilful misconduct or unlawful conduct of the Canadian Sub-Agent or such Canadian Bank or their respective officers, employees, agents or representatives, as the case may be.
(h) Rights of Canadian Bank as to Acceptances. Neither the Canadian Sub-Agent nor any Canadian Bank shall have any responsibility as to the application of the proceeds by any Canadian Borrower of any discounted proceeds of any Acceptances. For greater certainty, each Canadian Bank may, at any time, purchase Acceptances issued by any Canadian Borrower and may at any time and from time to time hold, sell, rediscount or otherwise dispose of any or all Acceptances accepted and/or purchased by it.
(i) Acceptance Equivalent Loans. Whenever any
Canadian Borrower delivers a Notice of Drawing to the Canadian
Sub-Agent under this Agreement requesting the Canadian Banks to
accept Drafts, a Canadian Bank may at its option, in lieu of
accepting Drafts, make an Acceptance Equivalent Loan. On each
date on which Drafts are to be accepted, subject to the same
terms and conditions applicable to the acceptance of Drafts, any
Canadian Bank that elects to make an Acceptance Equivalent Loan,
upon delivery by the applicable Canadian Borrower of an executed
promissory note substantially in the form of Exhibit E hereto (a
"Discount Note") payable to the order of such Canadian Bank, will
remit to the Canadian Sub-Agent in immediately available funds
for the account of such Canadian Borrower discounted proceeds in
regards thereto equal to the amount of BA Discount Proceeds that
would have applied had such Canadian Bank accepted and purchased
a Draft in the same face amount on the same day, net of the
Acceptance Fee payable in regard thereto under subparagraph
(j)(ii) of this Annex.
(j) Terms Applicable to Discount Notes. The term "Acceptance" when used in this Agreement shall be construed to include Discount Notes and all terms of this Agreement applicable to Acceptances shall apply equally to Discount Notes evidencing Acceptance Equivalent Loans with such changes as may in the context be necessary (except that no Discount Note may be sold, rediscounted or otherwise disposed of by the Canadian Bank making Acceptance Equivalent Loans other than pursuant to Section 8.07). For greater certainty:
(i) a Discount Note shall mature and be due and
payable on the same date as the maturity date for
Acceptances specified in the applicable Notice of Drawing;
(ii) an Acceptance Fee will be payable in respect
of a Discount Note and shall be calculated at the same rate
and in the same manner as the Acceptance Fee in respect of
an Acceptance; and
(iii) an Acceptance Equivalent Loan made by a Canadian Bank will be considered to be part of a Canadian Bank's outstanding Acceptances for all purposes of this Agreement.
(k) Prepayment of Acceptances and Discount Notes. No Acceptance or Discount Note may be repaid or prepaid prior to the maturity date of such Acceptance or Discount Note, except in accordance with the provisions of Article VI.
(l) At the option of any Canadian Bank, Acceptances under this Agreement to be accepted by such Canadian Bank may be issued in the form of depository bills payable to the order of "CDS&Co." for deposit with The Canadian Depository for Securities Limited pursuant to the Depository Bills and Notes Act (Canada). All depository bills so issued shall be governed by the provisions of this Annex.
EXHIBIT A-1
FORM OF NOTICE OF CONTRACT BORROWING
[Date]
The Chase Manhattan Bank
(the successor by merger to
Chase Bank of Texas, N.A.)
Energy Department
2200 Ross Avenue
3rd Floor
Dallas, Texas 75201
Attention: Lee Beckelman
Vice President
In the case of a Canadian Contact Borrowing, also:
The Chase Manhattan Bank of Canada
100 King Street West, Suite 6900
Toronto, Ontario M5X 1A4
Attention: Funding Officer
Ladies and Gentlemen:
The undersigned, Union Pacific Resources Group Inc. (the
"Company"), refers to the Amended and Restated Competitive
Advance/Revolving Credit Agreement dated as of October 25, 2000 (
as further restated, amended, modified, supplemented and in
effect from time to time, the "Credit Agreement", the terms
defined therein being used herein as therein defined), among the
Company, the Canadian Borrowers, the Guarantor, certain Banks
party thereto, The Chase Manhattan Bank (the successor by merger
to Chase Bank of Texas, N.A.), as Administrative Agent for said
Banks, and The Chase Manhattan Bank of Canada, as Canadian Sub-
Agent, and hereby gives you notice, irrevocably, pursuant to
Section 2.02 of the Credit Agreement that the Company [on behalf
of {enter applicable Borrower}] hereby requests a Contract
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Contract Borrowing
(the "Proposed Contract Borrowing") as required by Section
2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Contract Borrowing is ______________, 20___.
(ii) The Type and Class of Contract Advances comprising the Proposed Contract Borrowing is [US Alternate Base Rate Advances] [Canadian Prime Rate Contract Advance] [Eurodollar Rate Contract Advances].
(iii) The aggregate amount of the Proposed Contract Borrowing is $________________.
(iv) The Interest Period for each Contract Advance made as part of the Proposed Contract Borrowing is [_________ days] [_____________ month[s]].
Very truly yours,
UNION PACIFIC RESOURCES GROUP INC.
By:
Name:
Title:
EXHIBIT A-2
FORM OF NOTICE OF COMPETITIVE BORROWING
[Date]
The Chase Manhattan Bank
(the successor by merger to
Chase Bank of Texas, N.A.)
2200 Ross Avenue, 3rd Floor
Dallas, Texas 75201
Attention: Daniel Fischer
The Chase Manhattan Bank (the successor by merger to
Chase Bank of Texas, N.A.),as Administrative Agent
In care of The Loan and Agency Services Group
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Daniel Fischer
Fax: (212) 552-5777
Ladies and Gentlemen:
The undersigned, Union Pacific Resources Group Inc. (the "Company"), refers to the Amended and Restated Competitive Advance/Revolving Credit Agreement, dated as of October 25, 2000 (as further restated, modified, supplemented and in effect from time to time, the "Credit Agreement", the terms defined therein being used herein as therein defined), among the Company, the Canadian Borrowers, the Guarantor, certain Banks party thereto, The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Agent, and The Chase Bank of Canada, as Canadian Sub-Agent, hereby gives you notice pursuant to Section 2.03 of the Credit Agreement that the Company [on behalf of {enter applicable borrower}] hereby requests a Competitive Borrowing under the Credit Agreement, and in that connection sets forth the terms on which such Competitive Borrowing (the "Proposed Competitive Borrowing") is requested to be made:
1. Date of Proposed Competitive Borrowing (which is a Business Day)
2. Type and Class of Competitive Advances comprising the Proposed Competitive Borrowing1/
3. Aggregate Amount of Proposed Competitive Borrowing2/
4. Maturity Date3/
5. Other Provisions, if any
Very truly yours,
UNION PACIFIC RESOURCES GROUP INC.
By:
Name:
Title:
EXHIBIT A-3
FORM OF NOTICE OF COMPETITIVE BID REQUEST
[Date]
[Name of Bank]
[Address of Bank]
Attention:
Ladies and Gentlemen:
Reference is made to the Amended and Restated Competitive
Advance/Revolving Credit Agreement (as further restated, amended,
modified, supplemented and in effect from time to time, the
"Credit Agreement") dated as of October 25, 2000, among Union
Pacific Resources Group Inc. (the "Company"), the Canadian
Borrowers, the Guarantor, the Banks named therein, The Chase
Manhattan Bank (the successor by merger to Chase Bank of Texas,
N.A.), as Administrative Agent, The Chase Manhattan Bank of
Canada, as Canadian Sub-Agent. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement. The Company delivered a
Notice of Competitive Borrowing [on behalf of {enter applicable
borrower}] requesting a Competitive Borrowing on _______________,
20___ pursuant to Section 2.03(a) of the Credit Agreement and in
that connection you are invited to submit a Competitive Bid by
[Date] / [Time].4/
(A) Date of Proposed Competitive
Borrowing
(B) Type and Class of Competitive
Advances comprising the
Proposed Competitive Borrowing
(C) Aggregate Amount of Proposed Competitive Borrowing
(D) Maturity Date
Very truly yours,
The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Agent
By:
Name:
Title:
EXHIBIT A-4
FORM OF COMPETITIVE BID
[Date]
The Chase Manhattan Bank
(the successor by merger to
Chase Bank of Texas, N.A.),
as Administrative Agent for the
Banks referred to below
In care of The Loan and Agency Services Group
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Daniel Fischer
Fax: (212) 552-5777
Ladies and Gentlemen:
The undersigned, [Name of Bank], refers to the Amended and Restated Competitive Advance/Revolving Credit Agreement dated as of October 25, 2000 (as further restated, amended, modified, supplemented and in effect from time to time, the "Credit Agreement"), among Union Pacific Resources Group Inc. (the "Company"), the Canadian Borrowers, the Guarantor, the Banks named therein, The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian Sub-Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The undersigned hereby makes a Competitive Bid pursuant to Section 2.03(a)(ii) of the Credit Agreement in response to the Notice of Competitive Borrowing made by the Company [on behalf of {enter applicable borrower}] on _______________, 20___, and in that connection sets forth below the terms on which such Competitive Bid is made:
(A) Principal Amount5/
(B) Competitive Bid Rate6/
(C) Maturity Date7/
The undersigned hereby confirms that it is prepared to extend credit to the [enter applicable borrower] upon acceptance by the Company [on behalf of {enter applicable borrower}] of this bid in accordance with Section 2.03(a)(v) of the Credit Agreement.
Very truly yours,
[Name of Bank],
By:
Name:
Title:
EXHIBIT A-5
FORM OF COMPETITIVE BID ACCEPTANCE/REJECT LETTER
[Date]
The Chase Manhattan Bank
(the successor by merger to
Chase Bank of Texas, N.A.), as
Administrative Agent under the
Credit Agreement referred to below
The Loan and Agency Services Group
One Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Daniel Fischer
Fax: (212) 552-5777
Ladies and Gentlemen:
Reference is made to the Amended and Restated Competitive Bid/Revolving Credit Agreement dated as of October 25, 2000 (as further restated, amended, modified, supplemented and in effect from time to tome, the "Credit Agreement"), among Union Pacific Resources Group Inc. (the "Company"), the Canadian Borrowers, the Guarantor, the Banks named therein, The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian Sub-Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.
In accordance with Section 2.03(a)(ii) of the Credit
Agreement, the Company has received a notice of bids in
connection with its Notice of Competitive Borrowing dated [insert
date] and in accordance with Section 2.03(a)(iii) of the Credit
Agreement, the Company, [on behalf of {enter applicable Canadian
borrower}] hereby accepts the following bids for maturity on
[insert date]:
Principal Amount Fixed Bank
(or Face Amount Rate/Margin/BA
in Discount Rate
case of an
Acceptance)
$ [%] / [+/-,
|
_________________ .________%]
$ [%] / [+/-,
_________________ .________%]
The undersigned hereby rejects the following bids:
Principal Amount Fixed Bank
(or Face Amount Rate/Margin/BA
in Discount Rate
case of an
Acceptance)
$ [%] / [+/-,
|
_________________ .________%]
$ [%] / [+/-,
_________________ .________%]
The $______________ should be deposited in The Chase
Manhattan Bank, account number [insert number] on [insert date]
[or] [wire transferred to (Name of Bank) account number [insert
number] [other wire instructions] or [date]].
Very truly yours,
UNION PACIFIC RESOURCES GROUP
INC.
By:
Name:
Title:
EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
[Date]
Reference is made to the Amended and Restated Competitive Advance/Revolving Credit Agreement, dated as of October 25, 2000 (as further restated, amended, modified, supplemented and in effect from time to time, the "Credit Agreement") among Union Pacific Resources Group Inc., a Utah corporation (the "Company"), the Canadian Borrowers, the Guarantor, the Banks (as defined in the Credit Agreement), The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Agent for the Banks (the "Administrative Agent"), and The Chase Manhattan Bank of Canada, as Canadian Sub-Agent. Terms defined in the Credit Agreement are used herein with the same meaning.
_______________________ (the "Assignor") and ________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse and without any representations and warranties of the Assignor except as specifically set forth below, and the Assignee hereby purchases and assumes from the Assignor, a portion of the Assignor's rights and obligations under the Credit Agreement as of the Assignment Date (as defined below) equal to a ____________%8/ interest in and to all of the rights and obligations of the Banks under the Credit Agreement (including, without limitation, such percentage interest in the Commitments as in effect on the Assignment Date and the Advances, if any, outstanding on the Assignment Date).
2. The Assignor (i) represents and warrants that as of the date hereof its Commitment (without giving effect to assignments thereof which have not yet become effective) is $______________ [and its Maximum Canadian Commitment Amount is $___________]9 / and the aggregate outstanding principal amount (including the face amount of Acceptances) of Advances owing to it (without giving effect to assignments thereof which have not yet become effective is $_____________; (ii) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (iii) make no representation or warranty and assumes no responsibility with respect to any statements, warranties, or representations made in or in connection with the Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or any other instrument or document furnished pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Company or the Canadian Borrowers or the performance or observance by the Company or the Canadian Borrowers of any of their respective obligations under the Credit Agreement or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.01(f) thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Acceptance; (ii) agrees that it will, independently and without reliance upon the Administrative Agent or the Canadian Sub-Agent, the Assignor 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; (iii) confirms that it is an Eligible Assignee; (iv) appoints and authorizes the Administrative Agent and the Canadian Sub-Agent to take such action as administrative agents on its behalf and to exercise such powers as are reasonably incidental thereto; (v) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Bank; and (vi) specifies as its Domestic Lending Office (and address for notices) and Eurodollar Lending Office the offices set forth beneath its name on the signature pages hereof.
4. The effective date for this Agreement and Acceptance shall be ______________________ (the "Assignment Date")10/. Following the execution of this Agreement and Acceptance, it will be delivered to the Administrative Agent for acceptance and recording by the Administrative Agent.
5. Upon such acceptance and recording, as of the Assignment Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Bank thereunder, and (ii) the Assignor shall, to the extent provided in this Agreement and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording, from and after the Assignment Date, the Administrative Agent shall make all payments under the Credit Agreement in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Assignment Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in accordance with, the laws of the State of New York.
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
DOMESTIC LENDING OFFICE
(and address for notices)
[Address]
EURODOLLAR LENDING OFFICE
[Address]
Agreed to this _____ day
of _______________, 20___
ANADARKO PETROLEUM CORPORATION
By:
Name:
Title:
Accepted this ______ day
of ________________, 20___
The Chase Manhattan Bank (the successor by merger to
Chase Bank of Texas, N.A.),
as Administrative Agent
By:
Name:
Title:
EXHIBIT D
FORM OF NOTICE OF DRAWING
[Date]
The Chase Manhattan Bank of Canada
Suite 6900, 1 First Canadian Place
100 King Street West
Toronto, Ontario
M5X 1A4
Ladies and Gentlemen:
Reference is made to the Amended and Restated Competitive Advance/Revolving Credit Agreement dated as of October 25, 2000 (as further restated, amended, modified, supplemented and in effect from time to time, the "Credit Agreement"), among Union Pacific Resources Group Inc., the Canadian Borrowers, the Guarantor, the Banks named therein, The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Bank, as Administrative Agent, and The Chase Manhattan Bank of Canada, as Canadian Sub-Agent. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.
The undersigned Canadian Borrower hereby requests an advance of funds by way of Acceptance under the Credit Agreement and in that connection sets forth below the information relating to such advances as required by Section 2.18 and Annex I of the Credit Agreement.
(a) Business Day of the proposed
advance of funds _________________, 20___
(b) Aggregate face amount of
the Acceptance11/ C$
(c) Term ____________________ days
|
The undersigned Canadian Borrower acknowledges that, as a condition precedent to the acceptance of any of the requested Acceptances, an Acceptance Fee shall be payable to each of the Canadian Banks in respect thereof pursuant to Section 2.05(c) of the Credit Agreement.
By delivery of this Notice of Drawing and the acceptance of any or all of the Acceptances by the Canadian Banks in response to this Notice of Drawing, the Canadian Borrower shall be deemed to have represented and warranted that the conditions to lending specified in the Credit Agreement have satisfied with respect to the proposed advance of funds.
Yours truly,
[Name of Canadian Borrower]
By:
Name:
Title:
EXHIBIT E
FORM OF DISCOUNT NOTE
CDN $ _______________ Toronto, Ontario Date: _______________
FOR VALUE RECEIVED, _____________________, an
________________ corporation (the "Canadian Borrower"), hereby
promises to pay to the order of
_________________________________________________ (the "Canadian
Bank"), in lawful money of Canada in immediately available funds,
at the Canadian Sub-Agent's office (as such term is defined
below) initially located at Suite 6900, 1 First Canadian Place,
100 King Street West, Toronto, Ontario, M5X 1A4 on
_____________________ the principal sum of
_____________________________ ($____________) DOLLARS.
This Discount Note is one of the Discount Notes referred to in the Amended and Restated Competitive Advance/Revolving Credit Agreement dated as of October 25, 2000, among Union Pacific Resources Group Inc., the Canadian Borrowers, the Guarantor, the Banks named therein, The Chase Manhattan Bank (the successor by merger to Chase Bank of Texas, N.A.), as Administrative Agent and The Chase Manhattan Bank of Canada, as Canadian Sub-Agent (as further restated, amended, modified, supplemented and in effect from time to time, the "Credit Agreement") and is entitled to the benefits thereof and of any other documents referred to therein. All capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Credit Agreement.
In case an Event of Default shall occur and be continuing, the principal of this Discount Note may be declared to be due and payable in the manner and with the effect provided in the Credit Agreement.
The Canadian Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Discount Note.
THIS DISCOUNT NOTE SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
[Name of Canadian Borrower]
By:
Name:
Title:
SCHEDULE I
Amended and Restated Competitive Advance/Revolving Credit Agreement
Banks, Lending Offices and Commitments
BANK NOTICE DOMESTIC AND CANADIAN CANADIAN COMMITME CANADIAN
ADDRESS EURODOLLAR NOTICE LENDING NT COMMITME
(Other than LENDING ADDRESS OFFICE (In U.S. NT
Notices of OFFICE (Other than Dollars) (In U.S.
Borrowing) Notices of Dollars)
Borrowing)
The Chase 2200 Ross 2200 Ross 100 King 100 King $39,600,000 $36,000,000
Manhattan Avenue Avenue Street West Street West
Bank./ The Dallas, TX Dallas, TX Suite 6900 Suite 6900
Chase Manhattan 75201 75201 Toronto, Toronto
Bank of Canada Attn: Lee Attn: Lee Ontario M5X Ontario M5X
Beckelman Beckelman 1A4 1A4
Attn: Arun Attn: Arun
Bery Bery
The Toronto- Toronto- Toronto- Toronto- Toronto- N/A
Dominion Bank, Dominion Bank Dominion Bank Dominion Bank Dominion Bank
in respect of Tower Tower Tower Tower
the 55 King 555 King 555 King 555 King
participated Street West Street West Street West Street West
Canadian 9th Floor 9th Floor 9th Floor 9th Floor
Commitment with Toronto, Toronto, Toronto, Toronto,
The Chase Ontario M5K Ontario M5K Ontario M5K Ontario M5K
Manhattan Bank. 1A2 1A2 1A2 1A2
Attn: Credit Attn: Credit Attn: Credit Attn: Credit
Manager, Manager, Manager, Manager,
Financial Financial Financial Financial
Services Services Services Services
Credit Suisse 11 Madison 11 Madison One First One First $39,600,000 $35,300,000
First Boston/ Avenue Avenue Canadian Canadian
Credit Suisse 10th Floor 10th Floor Place Place
First Boston New York, NY New York, NY Suite 3000 Suite 3000
Canada 10010 10010 Toronto, Toronto,
Attn: David Attn: David Ontario M5X Ontario M5X
Koczan Koczan 1C9 1C9
Attn: Alain Attn: Alain
Daoust Daoust
Bank of 901 Main 901 Main Attn: Richard Attn: Richard $39,600,000 $35,300,000
America, N.A./ Street Street Hall Hall
Bank of America 64th Floor 64th Floor
Canada Dallas, TX Dallas, TX
75202 75202
Attn: J. Attn: J.
Scott Fowler Scott Fowler
Royal Bank of 2800 Post Oak 2800 Post Oak 335 8th 335 8th $39,600,000 $39,600,000
Canada Blvd. Blvd. Avenue SW Avenue SW
5700 Williams 5700 Williams 23rd Floor 23rd Floor
Tower Tower Calgary, Calgary,
Houston, TX Houston, TX Alberta T2P Alberta T2P
77056 77056 1C9 1C9
Attn: Jason Attn: Jason Attn: Sonia Attn: Sonia
York York Tibbets Tibbets
Bank of 700 Louisiana 700 Louisiana First First $31,500,000 $31,500,000
Montreal Street Street Canadian Canadian
Suite 4400 Suite 4400 Centre Centre
Houston, TX Houston, TX 24th Floor 24th Floor
77002 77002 350 - 7th 350 - 7th
Attn: Melissa Attn: Melissa Avenue S.W. Avenue S.W.
Bauman Bauman Calgary, Calgary,
Alberta T2) Alberta T2)
3N9 3N9
Attn: Elsa Attn: Elsa
Niebuhr Niebuhr
Citibank, N.A. Seven World Seven World N/A N/A $31,500,000 N/A
Trade Center Trade Center
New York, NY New York, NY
10048 10048
Attn: Attn:
Townsend Townsend
Weeks Weeks
Deutsche Bank 31 West 52nd 31 West 52nd 222 Bay 222 Bay $31,500,000 $20,000,000
AG, New Street Street Street Street
York and/or New York, NY New York, NY Suite 1200 Suite 1200
Cayman Island 10019 10019 P. O. Box 196 P. O. Box 196
Branches/ Attn: Joel Attn: Joel Toronto, Toronto,
Deutsche Bank Makowsky Makowsky Ontario M5K Ontario M5K
Canada 1H6 1H6
Attn: Rod Attn: Rod
O'Hara O'Hara
Bank One, N.A./ 910 Travis 910 Travis 161 Bay 161 Bay $31,500,000 $27,000,000
Bank One, Street Street Street Street
Canada 6th Floor 6th Floor Suite 4240 Suite 4240
Houston, TX Houston, TX Toronto, Toronto,
77002 77002 Ontario M5J Ontario M5J
Attn: Ronald Attn: Ronald 2S1 2S1
Dierker Dierker Attn: Lehong Attn: Lehong
Zhang Zhang
Toronto- 909 Fannin 909 Fannin 800 Home Oil 800 Home Oil $31,500,000 $31,500,000
Dominion(Texas) Street Street Tower Tower
, Suite 1700 Suite 1700 324 8th 324 8th
Inc. Houston, TX Houston, TX Avenue S.W. Avenue S.W.
The Toronto- 77010 77010 Calgary, Calgary,
Dominion Bank Attn: Mark Attn: Mark Alberta T2P Alberta T2P
Green Green 2Z2 2Z2
Attn: Loretta Attn: Loretta
Palandri Palandri
ABN Amro Bank, ABN AMRO ABN AMRO 2500 650 W. 2500 650 W. $31,500,000 $27,000,000
N.V./ Bank, N.V. Bank, N.V. Georgia St. Georgia St.
ABN Amro Bank 208 South 208 South Vancouver, BC Vancouver, BC
Canada LaSalle St. LaSalle St. V6B 4N8 V6B 4N8
Suite 1500 Suite 1500 Attn: Jane Attn: Jane
Chicago, IL Chicago, IL Taylor Taylor
60604-1003 60604-1003
Attn: Credit Attn: Loan
Administration Administration
UBS AG/ 677 677 154 154 $18,000,000 $15,000,000
UBS Bank Washington Washington University University
[Canada] Blvd. Blvd. Avenue Avenue
Stamford, CT Stamford, CT Toronto, Toronto,
06901 06901 Ontario M5H Ontario M5H
Attn: Attn: 3Z4 3Z4
Margarita Margarita Attn: Amy Attn: Amy
Mateo Saja Mateo Saja Fung Fung
The Bank of New One Wall One Wall N/A N/A $18,000,000 N/A
York Street Street
19th Floor 19th Floor
New York, NY New York, NY
10286 10286
Attn: Raymond Attn: Raymond
Palmer Palmer
Industrial Bank 333 Clay 333 Clay N/A N/A $12,600,000 N/A
of Japan Street Street
Suite 4850 Suite 4850
Houston, TX Houston, TX
77002 77002
Attn: Michael Attn: Michael
Oaks Oaks
Westdeutsche 1211 Avenue 1211 Avenue N/A N/A $12,600,000 N/A
Landesbank of the of the
Girozentrale, Americas Americas
New York New York, NY New York, NY
Branch 10036 10036
Attn: Felicia Attn: Felicia
LaForgia LaForgia
Mellon Bank, One Mellon One Mellon N/A N/A $12,600,000 N/A
N.A. Bank Center Bank Center
Room 4425 Room 4425
Pittsburgh, Pittsburgh,
PA 15258 PA 15258
Attn: Roger Attn: Roger
Howard Howard
KBC Bank N.V. 1349 West 1349 West N/A N/A $12,600,000 N/A
Peachtree St. Peachtree St.
Suite 1750 Suite 1750
Atlanta, GA Atlanta, GA
30309 30309
Attn: Michael Attn: Michael
Sawicki Sawicki
The Northern 50 South 50 South N/A N/A $6,300,000 N/A
Trust Company LaSalle St. LaSalle St.
B-11 B-11
Chicago, IL Chicago, IL
60675 60675
Attn: David Attn: David
Love Love
Suntrust Bank 25 Park Place 25 Park Place N/A N/A $6,300,000 N/A
Atlanta, GA Atlanta, GA
30303 30303
Attn: Todd Attn: Todd
Davis Davis
The Frost 777 Main 777 Main N/A N/A $3,600,000 N/A
National Bank Street Street
Suite 100 Suite 100
Ft. Worth, TX Ft. Worth, TX
76102 76102
Attn: John Attn: John
Warren Warren
TOTAL $450,000,000 $298,200,000
|
2 Not less than US$10,000,000 and in integral multiples of US$5,000,000 in excess thereof in respect of US Competitive Borrowing or a Eurodollar Rate Competitive Advance or not less than Cdn $10,000,000 and in integral multiples of Cdn $5,000,000 in respect of Acceptance as part of Canadian Competitive Borrowing.
3 (i) In the case of a Eurodollar Rate Competitive Borrowing, 1, 2, 3, or 6 months, (ii) in the case of an Acceptance Borrowing, 30, 60, or 90 calendar days (or such other period as agreed to by the Canadian Sub-Agent and the Canadian Banks), and (iii) in the case of a Fixed Rate Competitive Borrowing, not less than seven calendar days, and which in any case shall not end later than the Termination Date.
4 The Competitive Bid must be received by the Administrative Agent (i) in the case of Eurodollar Rate Competitive Advances, not later than 9:30 a.m., New York City time, three Business Days before a proposed Competitive Borrowing, (ii) in the case of a Fixed Rate Competitive Borrowing, not later than 9:30 a.m. New York City time, on the date of a proposed Competitive Borrowing and (iii) in the case of an Acceptance Borrowing, not later than 9:30 a.m. New York City time, one Business Day before a proposed Competitive Borrowing.
5 Not less than U.S.$10,000,000 or greater than the available aggregate Commitment and in integral multiples of U.S.$5,000,000 in respect of US Competitive Borrowing or a Eurodollar Rate Competitive Advance, or not less than Cdn $10,000,000 and in integral multiples of Cdn $5,000,000 in respect of Acceptances as part of Canadian Competitive Borrowing. Multiple bids will be accepted by the Administrative Agent.
6 i.e., Eurodollar Rate + or ________%, in the case of Eurodollar Rate Competitive Advances, or _______%, in the case of Fixed Rate Competitive Advance or _______% discount rate and _______% acceptance fee rate, in the case of an Acceptance Borrowing or Acceptance Equivalent Loan, as applicable (in each case, expressed in the form of a decimal to no more than four decimal places).
7 The Maturity Date must be as specified in the Notice of Competitive Borrowing.
8 Specify percentage to no more than four decimal points.
9 If the Assignor has a Maximum Canadian Commitment Amount, separately specify the percentage being assigned if different than the percentage of the Commitment being assigned.
10 Such date shall be at least three Business Days after the execution of this Assignment and Acceptance, unless otherwise agreed by the Company and the Administrative Agent.
11 Not less than Cdn. $10,000,000 and in integral multiples of Cdn. $5,000,000 in excess thereof.
EXHIBIT 10(a)
EMPLOYMENT AGREEMENT
AGREEMENT by and between Anadarko Petroleum Corporation, a Delaware corporation (the "Company") and George Lindahl III ("Executive") dated as of the 19th day of May, 2000.
The Company has determined that it is in the best interests of the Company and its shareholders to assure that Union Pacific Resources Group Inc., a Utah corporation ("UPR") will have the continued dedication of Executive pending the merger of the Company, Dakota Merger Corp. and UPR (the "Merger") pursuant to the Agreement and Plan of Merger dated as of April 2, 2000 (the "Merger Agreement") and to provide the surviving corporation after the Merger with continuity of management. Therefore, in order to accomplish these objectives, the Company and Executive desire to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Effective Date. The "Effective Date" shall mean the effective date of the Merger.
2. Employment Period. The Company hereby agrees to employ
Executive, and Executive hereby agrees to enter into the employ
of the Company subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and
ending on the third anniversary thereof (such period, the
"Employment Period").
3. Terms of Employment. (a) Position and Duties. (i) During
the Employment Period, Executive shall serve as the sole Vice
Chairman of the Company, reporting directly to the Chief
Executive Officer of the Company, with such authority, duties and
responsibilities as are commensurate with such position and as
may be consistent with such position, which shall include, but
not be limited to, primary responsibility for: (A) operations in
Canada and Latin America; (B) business/corporate development
(including mergers, acquisitions and dispositions); and (C)
merger transition and integration of UPR with and into the
Company. During the Employment Period, Executive shall also
serve as a member of the Board of Directors of the Company (the
"Board"). Executive's services hereunder shall be performed in
Houston, Texas.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave to which Executive is entitled, Executive agrees to devote substantially all of Executive's attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to Executive hereunder, to use Executive's reasonable best efforts to perform faithfully and efficiently such responsibilities. During the Employment Period it shall not be a violation of this Agreement for Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of Executive's responsibilities as an employee of the Company in accordance with this Agreement. It is expressly understood and agreed that to the extent that any such activities have been conducted by Executive prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of Executive's responsibilities to the Company.
(b) Compensation. (i) Base Salary and Guaranteed Annual Compensation. During the Employment Period, Executive shall receive an annual base salary ("Annual Base Salary") of $800,000. The Base Salary shall be paid to Executive in accordance with the Company's usual payroll practices.
(ii) Annual Bonus. During the Employment Period, Executive shall be eligible to receive an annual cash bonus ("Annual Bonus") on the same basis as the most senior executives of the Company other than the Chief Executive Officer ("Peer Executives").
(iii) Guaranteed Annual Compensation. During the Employment Period, the sum of the Annual Base Salary and the Annual Bonus that Executive shall receive per year will be at least $1,500,000 (the "Guaranteed Annual Compensation").
(iv) Incentive Awards. On the Effective Date, the Company shall grant Executive (A) 125,000 shares of restricted common stock of the Company (the "Restricted Shares"), (B) 125,000 shares of unrestricted common stock of the Company, and (C) an option to acquire 500,000 shares of the common stock of the Company (the "Option"), in each case pursuant to the terms of the Company's stock incentive plans. The Option will have an exercise price per share equal to the fair market value of the stock subject thereto on the date of grant (as determined under the terms of the Company's stock incentive plan). The Option shall remain exercisable until the seventh anniversary of the date of grant. Except as otherwise provided herein, the Option shall vest, and restrictions on the Restricted Shares shall lapse, in three equal installments on the last day of the first, second, and third years of the Employment Period.
(v) Retirement Benefits. (A) Upon termination of employment for any reason, Executive shall be entitled to a retirement benefit calculated in accordance with the Company Retirement Restoration Plan (the "Restoration Plan") calculated as if Executive terminated employment at age 57 with 17 years of credited service and a minimum final average pay of $1,500,000. This Restoration Plan benefit will be in the form of a single life annuity and shall not be less than $359,222 per year (before offsets for other qualified or nonqualified plans pursuant to this Section 3(b)(v)(A)). The Restoration Plan benefit shall then be reduced by any annuity amounts otherwise payable to Executive based on his actual age at termination pursuant to (1) any other qualified retirement plans of UPR or the Company, (2) the Supplemental Pension Plan for Exempt Salaried Employees of Union Pacific Resources Company and Affiliates (including any annuity contracts previously secured to provide for a portion of such benefit) and (3) any other nonqualified retirement plan of UPR or the Company (each UPR Plan as in effect immediately prior to the Effective Date) (such reduced benefit, the "Net Retirement Benefit"). Executive may elect within a reasonable period of time, as determined by the Company, following his Date of Termination (as defined below) to take this Net Retirement Benefit in the form of an annuity or an actuarially equivalent lump sum payment upon termination, or, to the extent agreed to by Executive and the Company, commencement of such distribution may be deferred pursuant to an agreement entered into by Executive and the Company prior to Executive's termination of employment. The amount of such annuity or lump sum payment(s) shall be determined based on the methods used for calculating such amounts under the Company's qualified plan in effect as of the Date of Termination and based on Executive's actual age at termination. A sample calculation assuming termination at age 55, age 56 and age 57 is provided in the attached schedule. The parties agree and acknowledge that Executive has relied on the methodology set forth in such calculations in entering into this Agreement. (B) Upon termination of employment for any reason, Executive shall also become eligible for lifetime retiree medical coverage for Executive and Executive's then-current spouse commencing as of the Date of Termination and such retiree medical coverage shall be in accordance with that provided to Peer Executives under the Company's retiree medical plan.
(vi) Other Employee Benefit Plans. During the Employment Period, except as otherwise expressly provided herein, Executive shall be entitled to participate in all employee benefit, welfare and other plans, practices, policies and programs of the Company on a basis no less favorable to Executive, in the aggregate, than the benefits provided generally to Peer Executives.
(vii) Expenses. During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by Executive in accordance with the Company's usual policies and practices generally applicable to Peer Executives.
(viii) Fringe Benefits. During the Employment Period, Executive shall receive fringe benefits no less favorable than those provided generally to Peer Executives.
(ix) Relocation. During the Employment Period, Executive shall receive relocation benefits no less favorable than those provided generally to Peer Executives; provided, however, that if Executive relocates at the Company's request prior to the commencement of the Employment Period, such relocation benefits shall be applicable to expenses incurred in such relocation.
(x) Vacation. During the Employment Period, Executive shall be entitled to paid vacation in accordance with the plans, policies, programs and practices of the Company and its affiliated companies, on a basis no less favorable than that applicable generally to Peer Executives.
4. Termination of Employment. (a) Death or Disability. Executive's employment shall terminate automatically upon Executive's death during the Employment Period. If the Company determines in good faith that the Disability of Executive has occurred during the Employment Period (pursuant to the definition of Disability set forth below), it may give to Executive written notice in accordance with Section 11(b) of this Agreement of its intention to terminate Executive's employment. In such event, Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by Executive (the "Disability Effective Date"), provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of Executive's duties. For purposes of this Agreement, "Disability" shall mean the absence of Executive from Executive's duties with the Company on a full-time basis for 180 consecutive business days as a result of incapacity due to mental or physical illness which is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to Executive or Executive's legal representative.
(b) Cause. The Company may terminate Executive's employment during the Employment Period for Cause or other than for Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful continued failure of Executive to perform substantially Executive's duties with the Company or one of its affiliates (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to Executive by the Board or the Chief Executive Officer of the Company which specifically identifies the manner in which the Board or Chief Executive Officer believes that Executive has not substantially performed Executive's duties, or
(ii) the willful engaging by Executive in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, or
(iii) conviction of a felony or a guilty or nolo contendere plea by Executive with respect thereto.
(c) Good Reason. Executive's employment may be terminated by Executive for Good Reason. For purposes of this Agreement, "Good Reason" shall mean, in the absence of a written consent of Executive:
(i) the assignment to Executive of any duties inconsistent in any respect with Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 3(a) of this Agreement, or any other action by the Company which, in Executive's reasonable judgment, results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;
(ii) any failure by the Company to comply with any of the provisions of Section 3(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by Executive;
(iii) the Company's requiring Executive to be based at any
office or location more than 25 miles from that provided in
Section 3(a)(i) hereof;
(iv) any purported termination by the Company of Executive's employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 10(c) of this Agreement.
For purposes of this Section 4(c), any good faith determination
of "Good Reason" made by Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 11(b) of this Agreement. For purposes of this Agreement, a "Notice of Termination" means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated, and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty days after the giving of such notice). The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company, respectively, hereunder or preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if Executive's employment is terminated by the Company for Cause, or by Executive for Good Reason, the date of receipt of the Notice of Termination or any later date specified therein within 30 days of such notice, as the case may be, (ii) if Executive's employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies Executive of such termination, and (iii) if Executive's employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executive or the Disability Effective Date, as the case may be.
5. Obligations of the Company Upon Termination. (a) Good Reason; Other Than for Cause; Death or Disability. If, during the Employment Period, the Company shall terminate Executive's employment other than for Cause, including by reason of Executive's Disability, or Executive shall terminate employment for Good Reason or by reason of death, this Agreement shall terminate without further obligations to Executive other than as follows:
(i) the Company shall pay to Executive (or Executive's estate or legal representative) in a lump sum in cash within 30 days after the Date of Termination the amount equal to the unpaid balance of Executive's Guaranteed Annual Compensation for the year in which Executive's Date of Termination occurs and Executive's Guaranteed Annual Compensation for each remaining year, if any, of the Employment Period;
(ii) the Option shall vest immediately and shall remain exercisable for the balance of the Employment Period, but in no event for less than three years following the Date of Termination;
(iii) any restrictions on (A) the Restricted Shares, and (B) any restricted shares granted to Executive by UPR and converted into restricted shares of Company stock in the Merger, shall lapse immediately;
(iv) any unvested options granted to Executive by UPR and converted into options on Company stock in the Merger shall vest in full;
(v) to the extent not theretofore paid or provided, the Company shall timely pay or provide to Executive any other amounts or benefits required to be paid or provided or which Executive is eligible to receive under any plan, program, policy or practice or contract or agreement of the Company and its affiliated companies through the Date of Termination (such other amounts and benefits shall be hereinafter referred to as the "Other Benefits"); and
(vi) the Retirement Benefit shall become payable.
(b) Cause; Other than for Good Reason. If Executive's employment shall be terminated for Cause or Executive terminates Executive's employment without Good Reason during the Employment Period, this Agreement shall terminate without further obligations to Executive other than the obligation to pay or provide to Executive (i) the Annual Base Salary through the Date of Termination, (ii) the earned Annual Bonus for the previous year, if any, (iii) the Retirement Benefit, and (iv) Other Benefits, in each case to the extent theretofore unpaid.
6. Certain Covenants. (a) Confidential Information. Executive
shall hold in a fiduciary capacity for the benefit of the Company
and its affiliated companies during the Employment Period and
thereafter all secret or confidential information, knowledge or
data relating to the Company or any of its affiliated companies
(including, without limitation, any proprietary and not publicly
available information concerning any processes, methods, trade
secrets, research, secret data, costs or names of users or
purchasers of their respective products or services, business
methods, operating procedures or programs or methods of promotion
and sale) that Executive obtains during Executive's employment by
the Company or any of its affiliated companies (including his
prior employment with UPR) and that is not public knowledge
(other than as a result of Executive's violation of this Section
6(a)) ("Confidential Information"). For the purposes of this
Section 6(a), information shall not be deemed to be publicly
available merely because it is embraced by general disclosures or
because individual features or combinations thereof are publicly
available. Executive shall not communicate, divulge or
disseminate Confidential Information at any time during or after
Executive's employment with the Company or any its affiliated
companies, except with the prior written consent of the Company,
or such affiliate, as applicable, or as otherwise required by law
or legal process.
(b) Noncompetition and Nonsolicitation. During the Employment
Period and for the shorter of (x) one year following the Date of
Termination, or (y) the period ending on the third anniversary of
the Effective Date, Executive shall not: (i) engage, anywhere
within the geographical areas in which the Company or any of its
affiliated companies is then conducting its business operations,
directly or indirectly, alone, in association with, or as a
shareholder, principal, agent, partner, officer, director,
employee or consultant of any other organization, in any business
(a "Competitive Business") that competes with any business then
being conducted by the Company or such affiliate; (ii) solicit or
encourage any individual who is an officer, employee or
consultant of the Company or any of its affiliated companies to
leave the employ of the Company or its affiliated companies; or
(iii) solicit, divert or take away, the business or patronage of
any of the customers or accounts, or prospective customers or
accounts, of the Company or any affiliate, which were contacted,
solicited or served by Executive while employed by the Company or
UPR; provided, however, that nothing herein shall prohibit
Executive from owning a maximum of two percent (2%) of the
outstanding stock of any publicly traded corporation.
(c) In the event of a breach or threatened breach of this
Section 6, Executive agrees that the Company shall be entitled to
injunctive relief in a court of appropriate jurisdiction to
remedy any such breach or threatened breach. Executive
acknowledges that damages would be inadequate and insufficient.
7. Non-exclusivity of Rights. Except as specifically provided,
nothing in this Agreement shall prevent or limit Executive's
continuing or future participation in any plan, program, policy
or practice provided by the Company or any of its affiliated
companies and for which Executive may qualify, nor, subject to
Section 11(f), shall anything herein limit or otherwise affect
such rights as Executive may have under any contract or agreement
with the Company or any of its affiliated companies. Amounts
which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program
of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice
or program or contract or agreement except as explicitly modified
by this Agreement.
8. No Mitigation; Legal Fees. In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment. The Company agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses that Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company, Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code").
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be
determined that any payment or distribution by the Company or any
of its affiliated companies to or for the benefit of Executive
(whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this
Section 9) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties
are incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then
Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by
Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 9(c), all determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by KPMG Peat Marwick LLP or such other certified public accounting firm reasonably acceptable to the Company as may be designated by Executive (the "Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to Executive within five days of (i) the later of the due date for the payment of any Excise Tax, and (ii) the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant to Section 9(c) and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.
(c) Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than ten business days after Executive is informed in writing of
such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to
the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Company notifies Executive in writing prior to the expiration of
such period that it desires to contest such claim, Executive
shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 9(c), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by Executive of an amount advanced by
the Company pursuant to Section 9(c), Executive becomes entitled
to receive any refund with respect to such claim, Executive shall
(subject to the Company's complying with the requirements of
Section 9(c)) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by Executive of
an amount advanced by the Company pursuant to Section 9(c), a
determination is made that Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify
Executive in writing of its intent to contest such denial of
refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
10. Successors. (a) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company
to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. As
used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
11. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:
If to Executive: George Lindahl III
c/o Anadarko Petroleum Corporation
17001 Northchase Drive
Houston, TX 77060-2141
If to the Company: Anadarko Petroleum Corporation
17001 Northchase Drive
Houston, TX 77060-2141
Attention: General Counsel
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or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notices and communications shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(d) The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.
(e) Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to
assert any right Executive or the Company may have hereunder,
including, without limitation, the right of Executive to
terminate employment for Good Reason pursuant to
Section 4(c)(i)-(v) of this Agreement, shall not be deemed to be
a waiver of such provision or right or any other provision or
right of this Agreement.
(f) From and after the Effective Date, subject to Section 12 and except as otherwise specifically provided herein, this Agreement shall supersede any other employment, severance or change of control agreement, arrangement, or understanding, whether written or oral, between the parties and between Executive and UPR, including, without limitation, the Agreement dated October 21, 1999 by and between UPR and Executive.
(g) This Agreement shall be void and of no further force or effect if the Merger is not consummated or upon termination of the Merger Agreement.
12. Change of Control. Executive shall be provided the Key Employee Change of Control Contract of the Company that is provided to Peer Executives. Such Key Employee Change of Control Contract shall be applicable solely upon a Change of Control subsequent to the Merger (as such term is defined therein). In the event Executive's employment terminates during the Employment Period following a Change of Control of the Company subsequent to the Merger, Executive may elect to receive severance and retirement benefits under the terms of either this Employment Agreement or the Key Employee Change of Control Contract, but not under both Agreements.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand and, pursuant to the authorization from its Board of Directors, the Company has caused this Agreement to be executed in its name on its behalf, all as of the day and year first above written.
George Lindahl III
ANADARKO PETROLEUM CORPORATION
By
Name:
Date:
EXHIBIT 10(b)
FIRST AMENDMENT TO
ANADARKO PETROLEUM CORPORATION
KEY EMPLOYEE CHANGE OF CONTROL CONTRACT
THIS AMENDMENT, dated as of July 11, 2000 ("Amendment"), by and between Anadarko Petroleum Corporation, a Delaware corporation ("Anadarko"), and _________________ (the "Executive"), amends the Key Employee Change of Control Contract by and between Anadarko and the Executive, dated as of the ___________ day of _______, 199__, (the "Contract"). Capitalized terms used but not defined herein shall have the meanings set forth in the Contract.
1. As permitted by Section 12 of the Contract and effective as of July 11, 2000, the following shall be added to Section 6(I) of the Contract:
"The foregoing notwithstanding and any other provisions of this Agreement notwithstanding, no amount shall be paid to Executive pursuant to Item F above due to the fact that Executive has received incident to its termination, any and all amounts payable and owing to him if he was a participant under the Company's Executive Deferred Compensation Plan.
2. As permitted by Section 12 of the Contract and effective as of July 11, 2000, the Contract is hereby amended to add the following new Section 13, to read in its entirety as follows:
13. UPR Transaction not a Change of Control. Notwithstanding any other provision of this Agreement to the contrary, for purposes of this Agreement or any rights relating thereto, a "Change of Control" shall not include any votes, transactions, acquisitions of stock ownership, changes in board composition, or other actions, transactions or consequences of any nature whatsoever, whether viewed in isolation or in the aggregate, occurring in connection with or resulting from the transactions contemplated by the Agreement and Plan of Merger among Anadarko Petroleum Corporation, Dakota Merger Corp., and Union Pacific Resources Group Inc., dated as of April 2, 2000 (as it may be amended or supplemented from time to time) and any related documents.
2. As amended hereby, the Contract is specifically ratified and reaffirmed.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed this 11th day of July, 2000.
ANADARKO PETROLEUM CORPORATION
By:____________________________________
Charles G. Manley
Sr. Vice President, Administration
EXECUTIVE
THIS AMENDMENT, dated as of July 11, 2000 ("Amendment"), by and between Anadarko Petroleum Corporation, a Delaware corporation ("Anadarko"), and _________________ (the "Executive"), amends the Key Employee Change of Control Contract by and between Anadarko and the Executive, dated as of the ___________ day of _______, 199__, (the "Contract"). Capitalized terms used but not defined herein shall have the meanings set forth in the Contract.
1. As permitted by Section 12 of the Contract and effective as of July 11, 2000, Section 6(i)F shall be deleted from the Contract.
2. As permitted by Section 12 of the Contract and effective as of July 11, 2000, the Contract is hereby amended to add the following new Section 13, to read in its entirety as follows:
13. UPR Transaction not a Change of Control. Notwithstanding any other provision of this Agreement to the contrary, for purposes of this Agreement or any rights relating thereto, a "Change of Control" shall not include any votes, transactions, acquisitions of stock ownership, changes in board composition, or other actions, transactions or consequences of any nature whatsoever, whether viewed in isolation or in the aggregate, occurring in connection with or resulting from the transactions contemplated by the Agreement and Plan of Merger among Anadarko Petroleum Corporation, Dakota Merger Corp., and Union Pacific Resources Group Inc., dated as of April 2, 2000 (as it may be amended or supplemented from time to time) and any related documents.
2. As amended hereby, the Contract is specifically ratified and reaffirmed.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed this 11th day of July, 2000.
ANADARKO PETROLEUM CORPORATION
By:____________________________________
Charles G. Manley
Sr. Vice President, Administration
EXECUTIVE
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
Nine Months Ended September 30, 2000 and Five Years Ended December 31, 1999
Nine Months
Ended
September 30 Years Ended December 31
millions 2000 1999 1998 1997 1996 1995
Gross Income $716.0 $178.9 $ (7.4) $205.3 $196.8 $65.6
Rentals 10.6 11.1 12.5 8.3 4.2 2.5
Earnings 726.6 190.0 5.1 213.6 201.0 68.1
Gross Interest Expense 120.8 96.1 82.4 62.0 56.0 52.5
Rentals 10.6 11.1 12.5 8.3 4.2 2.5
Fixed Charges $131.4 $107.2 $ 94.9 $ 70.3 $ 60.2 $55.0
Preferred Stock
Dividends 12.8 17.1 10.9 -- -- --
Combined Fixed Charges
and Preferred Stock
Dividends $144.2 $124.3 $105.8 $ 70.3 $ 60.2 $55.0
Ratio of Earnings to
Fixed Charges 5.53 1.77 0.05 3.04 3.34 1.24
Ratio of Earnings to
Combined Fixed Charges
and Preferred Stock
Dividends 5.04 1.53 0.05 3.04 3.34 1.24
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As a result of the Company's net loss in 1998, Anadarko's earnings did not cover fixed charges by $90 million and did not cover combined fixed charges and preferred stock dividends by $101 million.
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.
| ARTICLE 5 |
| CIK: 0000773910 |
| NAME: ANADARKO PETROLEUM CORPORATION |
| MULTIPLIER: 1,000,000 |
| PERIOD TYPE | 9 MOS |
| FISCAL YEAR END | DEC 31 2000 |
| PERIOD END | SEP 30 2000 |
| CASH | 129 |
| SECURITIES | 0 |
| RECEIVABLES | 835 |
| ALLOWANCES | 0 |
| INVENTORY | 98 |
| CURRENT ASSETS | 1,104 |
| PP&E | 15,254 |
| DEPRECIATION | 2,579 |
| TOTAL ASSETS | 15,092 |
| CURRENT LIABILITIES | 1,171 |
| BONDS | 4,024 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 200 |
| COMMON | 25 |
| OTHER SE | 6,019 |
| TOTAL LIABILITY AND EQUITY | 15,092 |
| SALES | 1,509 |
| TOTAL REVENUES | 1,509 |
| CGS | 620 |
| TOTAL COSTS | 620 |
| OTHER EXPENSES | 0 |
| LOSS PROVISION | 23 |
| INTEREST EXPENSE | 70 |
| INCOME PRETAX | 647 |
| INCOME TAX | 279 |
| INCOME CONTINUING | 368 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 368 |
| EPS BASIC | 2.22 |
| EPS DILUTED | 2.14 |