Exhibit 10.2
[EXECUTION
COPY]
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT,
dated as of May 17, 2006 (the “ Amendment ”),
among POGO PRODUCING
COMPANY , a Delaware corporation (the “
Borrower
”), the various financial institutions which are or may
become parties to the Credit Agreement, as amended hereby
(collectively, the “ Lenders ”),
BANK OF MONTREAL ,
acting through its Chicago, Illinois branch, as administrative
agent (the “ Administrative Agent ”) for
the Lenders, BANK OF AMERICA, N.A., TORONTO DOMINION (TEXAS)
LLC and BNP PARIBAS , as Co-Syndication Agents (“
Co-Syndication Agents ”) for the Lenders, WACHOVIA
BANK, NATIONAL ASSOCIATION , as Documentation Agent (“
Documentation Agent ”) for the Lenders, and
CITIBANK, N.A.
and THE BANK OF NOVA SCOTIA
, as managing agents (“
Managing Agents ”) for the Lenders.
W I
T N E S S E T H
WHEREAS the Borrower, the Lenders and the
Agents are parties to a certain Credit Agreement, dated as of
December 16, 2004, as amended to date (the “ Credit Agreement
”); and
WHEREAS, the Borrower has requested that Credit
Agreement be amended (i) to increase the Borrowing Base and provide
for certain future, automatic adjustments to the Borrowing Base in
certain situations and (ii) to make other changes, as set forth
herein; and
WHEREAS, subject to the terms and conditions of
this Amendment, the Lenders and the Agents are willing to enter
into this Amendment;
NOW, THEREFORE, in consideration of the
premises and the mutual agreements herein contained, the parties
hereto hereby agree as follows:
1.
DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, or except as the definition may be amended by
this Amendment, terms used in this Amendment, including its
preamble and recitals, shall have the meanings provided in the
Credit Agreement, as hereby amended.
2.
AMENDMENTS TO CREDIT AGREEMENT.
2.1
The definition of “Additional Senior Unsecured
Indebtedness” contained in Section 1.1 of the Credit
Agreement hereby is amended by replacing the reference to
“$50,000,000” with
“$100,000,000”.
2.2
The definition of “Borrowing Base Reduction Amount”
contained in Section 1.1 of the Credit Agreement hereby is amended
in its entirety to read as follows:
“
“ Borrowing Base Reduction Amount ” means, at
any time, 100% of the principal amount of all Senior Debt of the
Borrower issued or incurred since the last redetermination of the
Borrowing Base so long as such Senior Debt remains outstanding
plus 30% of the principal amount of all Additional
Subordinated Indebtedness issued or incurred since the last
redetermination of the Borrowing Base so long as such Additional
Subordinated Indebtedness remains outstanding.”
2.3
The definition of “Senior Debt” contained in Section
1.1 of the Credit Agreement hereby is amended in its entirety to
read as follows:
“
“ Senior Debt ” means, at the time of any
determination thereof, without duplication with respect to any of
the Borrower and its Restricted Subsidiaries, the principal amount
of all Indebtedness of that Person constituting borrowed money
(including, without limitation, any Senior Notes Indebtedness)
other than (i) Subordinated Indebtedness, (ii) Non-Recourse
Indebtedness, (iii) any Guarantee by that Person of any such
Indebtedness of the Borrower or any of its Subsidiaries, (iv) any
Guarantee by that Person of the portion of any such Indebtedness of
any of its Affiliates that is included at that time on the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries and Affiliates, (v) Loans outstanding and LC Exposure
under this Agreement and (vi) Additional Senior Unsecured
Indebtedness.”
2.4
The proviso to Section 8.1 of the Credit Agreement hereby is
amended in its entirety to read as follows:
“ provided
further that Indebtedness (other than Guarantees) of
Restricted Subsidiaries shall not exceed $75,000,000 in the
aggregate at any time.”
3.
BORROWING BASE.
3.1
Unless subject to further adjustment pursuant to the other
provisions of this Section 3 , by execution of this
Amendment, each of the Administrative Agent, the Required Borrowing
Base Lenders and the Borrower agree that, during the period from
the date hereof to the date of the next determination of the
Borrowing Base pursuant to the provisions of
Section 2.8 of the Credit Agreement, the Borrowing Base
shall equal $1,700,000,000. Notwithstanding the foregoing, the
Applicable Borrowing Base remains subject to adjustment due to
changes in the Borrowing Base Reduction Amount as set forth in the
Credit Agreement.
3.2
I n the event of the consummation of the Gulf of Mexico
Divestiture (as herein defined), by execution of this Amendment,
each of the Administrative Agent, the Required Borrowing Base
Lenders and the Borrower agree that, during the period from the
date hereof to the date of the next determination of the Borrowing
Base pursuant to the provisions of Section 2.8 of the
Credit Agreement, the Borrowing Base shall equal the then current
Borrowing Base (initially $1,700,000,000 pursuant to Section 3.1)
less $200,000,000. Notwithstanding the foregoing, the
Applicable Borrowing Base remains subject to adjustment due to
changes in the Borrowing Base Reduction Amount as set forth in the
Credit Agreement.
3.3
For purposes of this Amendment, the “ Gulf of Mexico
Divestiture ” means the divestiture by the Borrower of a
50% interest in the Borrower’s assets located in the Gulf of
Mexico, pursuant to that certain Purchase and Sale Agreement, dated
as of April 20, 2006, among the Borrower, as seller, and MitEnergy
Upstream LLC, as buyer, as may be amended from time to time in
accordance with the terms thereof.
3.4
Each of the Administrative Agent, the Required Borrowing Base
Lenders and the Borrower agree and acknowledge that the various
determinations, and redeterminations, of the Borrowing Base set
forth in this Section 3 shall not be considered to be a
Non-Standard
2
Determination of the Borrowing Base by the
Borrower, the Administrative Agent or the Required Borrowing Base
Lenders for the purposes of the first sentence of Section
2.8(b) of the Credit Agreement.
3.5
Each of the Administrative Agent, the Required Borrowing Base
Lenders and the Borrower waive any right to a redetermination of
the Borrowing Base pursuant to Section 2.8(c)(i) of the Credit
Agreement in connection with the consummation of the Gulf of Mexico
Divestiture.
4.
EFFECTIVENESS. This Amendment shall become effective as of
the date hereof when the Administrative Agent shall have received
counterparts hereof duly executed by the Borrower, the
Administrative Agent and each of the Required Borrowing Base
Lenders or Required Lenders (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), as
applicable.
5.
REPRESENTATIONS AND WARRANTIES.
In
order to induce the Lenders and the Agents to enter into this
Amendment, the Borrower hereby reaffirms, as of the date hereof,
its representations and warranties contained in Article VI of the
Credit Agreement (except to the extent any such representation and
warranty relates solely to an earlier date) and additionally
represent
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