Item 1.01 Entry into a Material Definitive Agreement.
Term Loan Agreement
On June 3, 2019, Occidental Petroleum Corporation (“Occidental”) entered into an $8.8 billion Term Loan Agreement (the “Term Loan Agreement”) with Citibank, N.A., as
administrative agent, and certain financial institutions, as lenders, pursuant to which such lenders committed to provide, contingent on completion of the Merger (as defined below), (1) a 364-day senior unsecured term loan facility in an aggregate
principal amount of $4.4 billion (the “364-Day Tranche”) and (2) a two-year senior unsecured term loan facility in an aggregate principal amount of $4.4 billion (the “2-Year Tranche” and, together with the 364-Day Tranche, the “Term Loan
Facilities”). On August 8, 2019, the conditions to funding of the Term Loan Facilities were satisfied and the loans thereunder were funded. The proceeds of the Term Loan Facilities were used by Occidental to partially finance the Merger and pay
related fees and expenses.
Loans under the Term Loan Facilities will bear interest, at the option of Occidental, at either the Eurodollar Rate (determined in accordance with the Term Loan Agreement)
or the Alternate Base Rate (determined in accordance with the Term Loan Agreement), in each case plus a per annum applicable rate that fluctuates (1) in the case of the 364-Day Tranche, between 50.0 basis points and 175.0 basis points, in the case of
loans priced at the Eurodollar Rate, and between 0.0 basis points and 75.0 basis points, in the case of loans priced at the Alternate Base Rate, and (2) in the case of the 2-Year Tranche, between 62.5 basis points and 187.5 basis points, in the case
of loans priced at the Eurodollar Rate, and between 0.0 basis points and 87.5 basis points, in the case of loans priced at the Alternative Base Rate, in each case, based upon the long-term unsecured senior, non-credit enhanced debt ratings of
Occidental by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services, a division of S&P Global Inc., subject to certain provisions taking into account potential differences in ratings issued by the relevant ratings agencies or
a lack of ratings issued by such ratings agencies (the “Ratings”).
The Term Loan Agreement contains certain customary covenants and events of default, including a customary negative pledge and a covenant that Occidental will maintain, as
of the last day of each fiscal quarter, a ratio not in excess of 0.65 to 1.00 of Total Debt to Total Capitalization (as such terms are defined in the Term Loan Agreement). If any of the events of default occur and are not cured within applicable
grace periods or waived, any unpaid amounts under the Term Loan Agreement may be declared immediately due and payable.
Amended and Restated Revolving Credit Agreement
On June 3, 2019, Occidental entered into an Amended and Restated Credit Agreement (the “Revolving Credit Agreement” and, together with the Term Loan Agreement, the “Credit
Agreements”, and the facility thereunder, the “Revolving Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent, and certain financial institutions party thereto, as lenders. The Revolving Credit Agreement amended and restated
Occidental’s previous revolving credit agreement and provided, among other things, for the commitments under the Revolving Credit Facility to be increased from an aggregate principal amount of $3.0 billion to $5.0 billion, contingent upon completion
of the Merger. On August 8, 2019, the commitments under the Revolving Credit Facility were increased to $5.0 billion. As of August 8, 2019, Occidental had no borrowings outstanding under the Revolving Credit Facility.
Loans under the Revolving Credit Facility will mature on January 31, 2023 and will bear interest, at Occidental’s option, at either the Eurodollar Rate (determined in
accordance with the Revolving Credit Agreement) or the Alternate Base Rate (determined in accordance with the Revolving Credit Agreement), in each case plus a per annum applicable rate that fluctuates between 46.0 basis points and 145.0 basis points,
in the case of loans priced at the Eurodollar Rate, and between 0.0 basis points and 45.0 basis points, in the case of loans priced at the Alternate Base Rate, in each case, based upon Occidental’s Ratings.
The Revolving Credit Agreement contains certain customary covenants and events of default, including a customary negative pledge and a covenant that Occidental will
maintain, as of the last day of each fiscal quarter, a ratio not in excess of 0.65 to 1.00 of Total Debt to Total Capitalization (as such terms are defined in the Revolving Credit Agreement). If any of the events of default occur and are not cured
within applicable grace periods or waived, any unpaid amounts under the Revolving Credit Facility may be declared immediately due and payable.
Some of the lenders under the Credit Agreements and/or their affiliates have in the past performed, or currently perform, investment banking, financial advisory, lending
and/or commercial banking services, or other services for Occidental and its subsidiaries (including in connection with the Merger and the other transactions described in this Current Report on Form 8-K), for which they have received, or may in the
future receive, customary compensation and expense reimbursement.
The foregoing summaries of the Credit Agreements do not purport to be complete and are subject to, and qualified in their entirety by, the full text of the Credit
Agreements, which are attached as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.