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EXHIBIT 10.5
________________________________________________________________________________
THIRD AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
dated as of December 18, 1995
among
APACHE CORPORATION
and
VARIOUS COMMERCIAL LENDING INSTITUTIONS,
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent and Arranger
and
CHEMICAL BANK,
as Co-Agent and Arranger
________________________________________________________________________________
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THIRD AMENDMENT TO THIRD AMENDED
AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of December 18, 1995, (the "Third Amendment"), is among APACHE
CORPORATION, a Delaware corporation (the "Company"), the various commercial
lending institutions as are or may become parties hereto (the "Lenders"), THE
FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent (in such capacity, the
"Administrative Agent") and Arranger (in such capacity, an "Arranger") and
CHEMICAL BANK, as Co-Agent (in such capacity, the "Co-Agent") and Arranger (in
such capacity, an "Arranger").
W I T N E S S E T H:
1. The Company, the Lenders, the Arrangers, the Co-Agent and the
Administrative Agent have heretofore entered into that certain Third Amended
and Restated Credit Agreement, dated as of March 1, 1995, as previously amended
(the "Credit Agreement").
2. The Company, the Lenders, the Arrangers, the Co-Agent and the
Administrative Agent now intend to amend the Credit Agreement (i) to permit
Apache Oil Egypt, Inc. to finance its share of the cost to develop a recent
discovery in the Qarun Concession in the Western Desert of the Arab Republic of
Egypt by entering into a $25 million loan to be arranged by the International
Finance Corporation, (ii) to clarify certain provisions of the Credit Agreement
relating to permitted Contingent Obligations, (iii) to adjust the pricing under
the Credit Agreement, (iv) to remove two of the current Lenders and to reduce
the Commitments of two of the current Lenders under the Third Amended and
Restated Credit Agreement and to adjust the Commitments and percentages of the
remaining Lenders to reflect such removals and reductions and (v) to address
various other issues in connection therewith as follows:
I. AMENDMENTS TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT.
A. Section 1.1 of the Credit Agreement is hereby amended by
adding the following definitions of "Apache Egypt" and "IFC" in appropriate
alphabetical order:
"Apache Egypt" means Apache Oil Egypt, Inc., a Delaware
corporation.
"IFC" means the International Finance Corporation.
B. The definition of "Lenders" appearing in Section 1.1 of the
Credit Agreement is hereby amended in its entirety to the following:
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"Lenders" means the financial institutions listed on Exhibit
"A" to the Third Amendment to Third Amended and Restated Credit
Agreement dated as of December 14, 1995 and their respective
successors and assigns in accordance with Section 17.3 (including any
commercial lending institution becoming a party hereto pursuant to an
Assignment Agreement) or otherwise by operation of law.
C. Section 11.1 of the Credit Agreement is hereby amended (i) by
amending subsection 11.1(a) in its entirety to the following:
" (a) The Obligations arising under the Loan Documents,
Contingent Obligations permitted under Section 11.4, and intercompany
Indebtedness pursuant to Investments by the Company permitted by
Sections 11.12(d), (e), (g), (h) and (i);";
(ii) by deleting from subsection 11.1(i) the letter "(h)" from the second line
thereof and by replacing it with the letter "(i)"; (iii) by relettering
subsection 11.1(i) as subsection 11.1(j); and (iv) by inserting the following
after subsection 11.1(h) thereof:
" (i) Other Indebtedness of Apache Egypt to IFC in a
maximum aggregate principal amount of $25,000,000, together with
interest, fees and expenses related thereto; and".
D. Section 11.4 of the Credit Agreement is hereby amended (i) by
deleting "$30,000,000" from the fifth line of Section 11.4 and by replacing it
with "45,000,000"; (ii) by amending subsection 11.4(d) in its entirety to the
following:
"(d) (i) net Contingent Obligations of International and Apache
Overseas, Inc. and any Subsidiaries of Apache Overseas, Inc.
consisting of foreign work commitments or other similar obligations
(but not including obligations under authorizations for expenditures
and other joint operating arrangements) under exploration or
production licenses or agreements entered into by International or
Apache Overseas, Inc. or any Subsidiaries of Apache Overseas, Inc. in
the ordinary course of business not to exceed net at any one time
outstanding for all such Contingent Obligations of $85,000,000 and
(ii) Contingent Obligations of International and Apache Overseas, Inc.
and any Subsidiaries of Apache Overseas, Inc. consisting of
obligations under authorizations for expenditures and other joint
operating arrangements entered into by International or Apache
Overseas, Inc. or any Subsidiaries of Apache Overseas, Inc. in the
ordinary course of business; provided that for purposes of clause
(d)(i), net Contingent Obligations shall be deemed to be
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the difference between the aggregate for all such Contingent
Obligations in respect of foreign work commitments or other similar
obligations in which International or Apache Overseas, Inc. or any
Subsidiaries of Apache Overseas, Inc. is required to perform or pay a
certain amount (but not including obligations under authorizations for
expenditures and other joint operating arrangements) less the
aggregate of such Contingent Obligations in respect of which another
industry partner (which the Company reasonably believes is capable of
performing such commitments or obligations) has become obligated to
perform,";
(iii) by deleting the word "and" at the end of subsection 11.4(g); and (iv) by
deleting subsection 11.4(h) in its entirety and inserting the following:
"(h) Contingent Obligations in respect of obligations of partnerships,
corporations or limited liability companies of which the Company or
its Subsidiaries are partners, shareholders or members, respectively,
pursuant to any oil, gas and/or mineral leases, farm-out agreements,
division orders, contracts for the sale, delivery, purchase, exchange,
or processing of oil, gas and/or other hydrocarbons, unitization and
pooling declarations and agreements, operating agreements, development
agreements, area of mutual interest agreements, marketing agreement or
arrangements, and other agreements which are customary in the oil, gas
and other mineral exploration, development and production business and
in the business of processing of gas and gas condensate production for
the extraction of products therefrom, and (i) Contingent Obligations
of the Company to IFC relating to Apache Egypt not exceeding
$25,000,000 in the aggregate principal amount, together with interest,
fees and expenses related thereto."
E. Section 11.5 of the Credit Agreement is hereby amended by
inserting the following after subsection 11.5(i) thereof:
"(j) Liens securing the Indebtedness permitted in connection with
Section 11.1(i)."
F. Subsection 11.7(c) of the Credit Agreement is hereby amended
in its entirety to the following:
" (c) the Company will not and will not permit any of its
Subsidiaries to make any optional payment or prepayment on, or
redemption of, or redeem, purchase or defease prior to its stated
maturity, any Indebtedness other than Indebtedness incurred under this
Agreement, the other Loan Documents, or the repurchase of any
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remarketed notes under the Remarketed Note Program, Indebtedness of
Offshore, Indebtedness evidenced by the DEKALB Notes or Indebtedness
to the IFC in connection with Apache Egypt; provided with respect to
Indebtedness of Offshore, that the optional payment or prepayment be
made with proceeds of the facility described in item A.1 of Schedule
11.1; provided with respect to Indebtedness of DEKALB evidenced by the
DEKALB Notes, that the optional payment or prepayment be made with
proceeds of the facility described in item B.1 or B.2 of Schedule
11.1, with cash on hand at DEKALB or with proceeds of Investments
permitted pursuant to Section 11.12(i); and provided that DEKALB may
borrow, repay and reborrow pursuant to the facilities described as
item B.1, B.2 and B.3 of Schedule 11.1;".
G. Section 11.12 of the Credit Agreement is hereby amended (i) by
amending subsection 11.12(e) in its entirety to the following:
" (e) in the ordinary course of business, Investments in
Subsidiaries, including, without limitation, International, Apache
Energy Limited, Apache Overseas, Inc. or any of their Subsidiaries,
for (i) the acquisition, exploration, drilling or development of
Properties which are located outside the United States of America and
are not included in the Borrowing Base, or (ii) costs incurred in
connection with gathering, processing, transporting and marketing
production from such Properties;";
(ii) by amending subsection 11.12(f) in its entirety to the following:
" (f) [Intentionally Omitted];";
and (iii) by amending subsection 11.12(h) in its entirety to the following:
" (h) Investments in Persons which (A) Persons arise as a
result of joint operations of oil and gas properties wherever located,
pursuant to joint operating agreements, partnership agreements, or
joint venture agreements containing terms and provisions customary in
the oil and gas business and entered into in the ordinary course of
business, and (B) Investments are in respect of the joint operations
of such Properties pursuant to such joint operating agreements,
partnership agreements or joint venture agreements;".
H. Schedule B to the Credit Agreement is hereby replaced by
Schedule B to this Third Amendment, and the definition of Alternate
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Base Rate Spread in the Credit Agreement shall be amended in its entirety to
the following:
"Alternate Base Rate Spread means 0.00 for all purposes of this
Agreement."
II. EFFECTIVENESS. This Third Amendment shall become effective as
of the date hereof when the Administrative Agent shall have received (a)
counterparts hereof duly executed by the Company, the Lenders, the
Administrative Agent and the Co-Agent (or, in the case of any party as to which
an executed counterpart shall not have been received, telegraphic, telex, or
other written confirmation from such party of execution of a counterpart hereof
by such party), (b) duly executed promissory notes substantially in the form of
Exhibits A-1 to the Third Amended and Restated Credit Agreement payable to the
order of The First National Bank of Chicago, Bank of Montreal, NationsBank,
Banque Paribas, The Chase Manhattan Bank, N.A., Christiania Bank og
Kreditkasse, The Long-Term Credit Bank of Japan, Ltd. and Royal Bank of Canada,
Grand Cayman (North American #1) Branch, each in a principal amount equal to
the Commitment of such Lender set forth in Exhibit "A" hereto, and (c) payments
by any Lenders which may be required as a result of the adjustment of the
Commitments of such Lenders pursuant to this Third Amendment. Upon
effectiveness of this Third Amendment, each Lender shall have the Commitment
and percentage set forth in Exhibit "A" hereto.
III. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce
the Lenders, the Administrative Agent, the Co-Agent and the Arrangers to enter
into this Third Amendment, the Company hereby reaffirms, as of the date hereof,
its representations and warranties in their entirety contained in Article VIII
of the Credit Agreement and in all other documents executed pursuant thereto
(except to the extent such representations and warranties relate solely to an
earlier date) and additionally represents and warrants as follows:
(i) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority, permits
and approvals, and is in good standing to conduct its business in each
jurisdiction in which its business is conducted.
(ii) The Company has the corporate power and authority and
legal right to execute and deliver this Third Amendment and to perform
its obligations hereunder. The execution and delivery by the Company
of this Third Amendment and the performance of its obligations
hereunder have been duly authorized by proper corporate proceedings,
and this Third Amendment and the Credit Agreement, as amended hereby,
constitute the legal, valid and binding obligations of the
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Company, enforceable against the Company in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally.
(iii) No Default or Unmatured Default has occurred and is
continuing as of the date hereof.
(iv) There has been no material adverse change (a) in the
businesses, assets, properties, operations, condition (financial or
otherwise) or results of operations or prospects of the Company and
its Subsidiaries from March 1, 1995, (b) affecting the rights and
remedies of the Lenders under and in connection with this Third
Amendment and the Credit Agreement, as amended by this Third
Amendment, or (c) in the ability of the Company to perform its
obligations under this Third Amendment or the Credit Agreement, as
amended by this Third Amendment.
(v) There is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of
any of their officers threatened against or affecting the Company or
its Subsidiaries which is or could have a Material Adverse Effect.
IV. DEFINED TERMS. Except as amended hereby, terms used herein
when defined in the Credit Agreement shall have the same meanings herein unless
the context otherwise requires.
V. REAFFIRMATION OF CREDIT AGREEMENT. This Third Amendment shall
be deemed to be an amendment to the Credit Agreement, and the Credit Agreement,
as amended hereby, is hereby ratified, approved and confirmed in each and every
respect. All references to the Credit Agreement herein and in any other
document, instrument, agreement or writing shall hereafter be deemed to refer
to the Credit Agreement as amended hereby.
VI. GOVERNING LAW. THIS THIRD AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
All obligations of the Company and rights of the Lenders, the Administrative
Agent, the Co-Agent and the Arrangers and any other holders of the Notes
expressed herein shall be in addition to and not in limitation of those
provided by applicable law.
VII. SEVERABILITY OF PROVISIONS. Any provision in this Third
Amendment that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to
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this end the provisions of this Third Amendment are declared to be severable.
VIII. COUNTERPARTS. This Third Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Third Amendment by
signing any such counterpart.
IX. HEADINGS. Article and section headings in this Third
Amendment are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of this Third Amendment.
X. SUCCESSORS AND ASSIGNS. This Third Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
XI. NOTICE. THIS WRITTEN THIRD AMENDMENT TOGETHER WITH THE THIRD
AMENDED AND RESTATED CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Company, the Lenders, the Administrative
Agent, the Co-Agent and the Arrangers have executed this Third Amendment as of
the date first above written.
APACHE CORPORATION
By:/s/ Clyde E. McKenzie
------------------------------------
Name: Clyde E. McKenzie
Title: Vice President and Treasurer
THE FIRST NATIONAL BANK OF CHICAGO,
Individually, as Administrative Agent
and as Arranger
By:/s/ Christine Frank
------------------------------------
Name: Christine Frank
Title: Vice President
CHEMICAL BANK, Individually, as
Co-Agent and as Arranger
By:/s/ R. Potter
------------------------------------
Name: Ronald Potter
Title: Managing Director
BANK OF MONTREAL, Individually and as
Lead Manager
By:/s/ Robert Roberts
------------------------------------
Name: Robert L. Roberts
Title: Director, U.S. Corporate Banking
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CIBC INC., Individually and as Lead
Manager
By:/s/ Gary C. Gaskill
------------------------------------
Name: Gary C. Gaskill
Title: Vice President
NATIONSBANK, Individually and as Lead
Manager
By:/s/ Jo A. Tamalis
------------------------------------
Name: Jo A. Tamalis
Title: Senior Vice President
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION
By:/s/ Laura B. Shepard
------------------------------------
Name: Laura B. Shepard
Title: Vice President
BANQUE PARIBAS
By:/s/ Charles K. Thompson
------------------------------------
Name: Charles K. Thompson
Title: Group Vice President
By:/s/ G.J. Jeram
------------------------------------
Name: G.J. Jeram
Title: Vice President
SOCIETE GENERALE, SOUTHWEST AGENCY
By:/s/ R.A. Erbert
------------------------------------
Name: Richard A. Erbert
Title: Vice President
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MIDLAND BANK PLC, NEW YORK BRANCH
By:/s/ John A. Cleveland
------------------------------------
Name: John A. Cleveland
Title: Senior Vice President
MORGAN GUARANTY TRUST COMPANY OF
NEW YORK
By:/s/ P.W. McNeal
------------------------------------
Name: Philip W. McNeal
Title: Vice President
ABN-AMRO BANK N.V. - HOUSTON AGENCY
By:/s/ Michael N. Oakes
------------------------------------
Name: Michael N. Oakes
Title: Vice President
By:/s/ H. Gene Shiels
------------------------------------
Name: H. Gene Shiels
Title: Vice President
THE FIRST NATIONAL BANK OF BOSTON
By:/s/ J.R. Vaughan, Jr.
------------------------------------
Name: J.R. Vaughan, Jr.
Title: Vice President and Director
Energy & Utilities Division
THE BANK OF NOVA SCOTIA, SAN FRANCISCO
AGENCY
By:/s/ F.C.H. Ashby
------------------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
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THE CHASE MANHATTAN BANK, N.A.
By:/s/ Bettylou J. Robert
------------------------------------
Name: Bettylou J. Robert
Title: Vice President
CITIBANK, N.A.
By:/s/ Arezoo Jafari
------------------------------------
Name: Arezoo Jafari
Title: Assistant Vice President
THE FUJI BANK, LIMITED - HOUSTON AGENCY
By:/s/ Soichi Yoshida
------------------------------------
Name: Soichi Yoshida
Title: Vice President & Senior Manager
UNION BANK OF SWITZERLAND, HOUSTON
AGENCY
By:/s/ E. Swann
------------------------------------
Name: Evans Swann
Title: Managing Director
By:/s/ Kelly Boots
------------------------------------
Name: Kelly Boots
Title: Assistant Treasurer
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UNION BANK
By:/s/ Richard P. DeGrey
------------------------------------
Name: Richard P. DeGrey
Title: Vice President
By:/s/ Walter M. Roth
------------------------------------
Name: Walter M. Roth
Title: Vice President
CHRISTIANIA BANK OG KREDITKASSE
By:/s/ Jahn O. Roising
------------------------------------
Name: Jahn O. Roising
Title: First Vice President
By:/s/ Peter M. Dodge
------------------------------------
Name: Peter M. Dodge
Title: Vice President
COLORADO NATIONAL BANK
By:/s/ Monte E. Deckerd
------------------------------------
Name: Monte E. Deckerd
Title: Vice President
THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By:/s/ S. Otsubo
------------------------------------
Name: Satoru Otsubo
Title: Joint General Manager
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NBD BANK
By:/s/ George R. Schanz
------------------------------------
Name: George R. Schanz
Title: Vice President
ROYAL BANK OF CANADA, GRAND CAYMAN
(NORTH AMERICAN #1) BRANCH
By:/s/ J.D. Frost
------------------------------------
Name: J.D. Frost
Title: General Manager
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SCHEDULE B
EURODOLLAR SPREAD
- --------------------------------------------------------------------------------
Debt/Capitalization Ratio Less than .55 .55 or greater
- --------------------------------------------------------------------------------
A-/A3 or Higher*
Floating Spread .250% .500%
- --------------------------------------------------------------------------------
BBB/Baa2 or Higher*
Floating Spread .350% .600%
- --------------------------------------------------------------------------------
BBB-/Baa3 or Higher*
Floating Spread .425% .675%
- --------------------------------------------------------------------------------
Lower than BBB-/Baa3*
Floating Spread .625% .875%
- --------------------------------------------------------------------------------
FACILITY FEE RATES
- --------------------------------------------------------------------------------
Debt/Capitalization Ratio Less than .55 .55 or greater
- --------------------------------------------------------------------------------
A-/A3 or Higher*
Floating Spread .125% .125%
- --------------------------------------------------------------------------------
BBB/Baa2 or Higher*
Floating Spread .150% .150%
- --------------------------------------------------------------------------------
BBB-/Baa3 or Higher*
Floating Spread .200% .200%
- --------------------------------------------------------------------------------
Lower than BBB-/Baa3*
Floating Spread .250% .250%
- --------------------------------------------------------------------------------
*Rating of the Company's Long-Term Debt by (2) two or more Rating Agencies
Schedule B - Page 1
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EXHIBIT "A"
COMMITMENT
NAME OF LENDER $ MILLIONS PERCENTAGE
- -------------- ---------- ----------
The First National Bank
of Chicago (Administrative
Agent) $100 10.0%
Chemical Bank (Co-Agent) 65 6.5%
Bank of Montreal 65 6.5%
NationsBank 65 6.5%
CIBC Inc. 50 5.0%
Royal Bank of Canada,
Grand Cayman (North
America #1) Branch 50 5.0%
Bank of America National
Trust & Savings Association 45 4.5%
Christiania Bank og
Kreditkasse 45 4.5%
Societe Generale,
Southwest Agency 45 4.5%
Morgan Guaranty Trust
Company of New York 45 4.5%
ABN-AMRO Bank N.V. -
Houston Agency 40 4.0%
The Bank of Nova Scotia,
San Francisco Agency 40 4.0%
Bank of Switzerland 40 4.0%
CitiBank, N.A. 40 4.0%
The First National Bank
of Boston 40 4.0%
The Fuji Bank, Limited -
Houston Agency 40 4.0%
The Long-Term Credit Bank
of Japan, Ltd. 40 4.0%
Exhibit "A" - Page 1
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Union Bank 40 4.0%
Banque Paribas 35 3.5%
The Chase Manhattan Bank,
N.A. 35 3.5%
Colorado National Bank 35 3.5%
------ ----
TOTAL $1,000 100%
Exhibit "A" - Page 2