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.”

 

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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           In 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

 

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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 represents and warrants as follows:

 

5.1           Organization, etc.  The Borrower has full corporate power and
authority and holds all requisite Governmental Approvals to enter into and
perform its obligations in respect of the Financing Transactions, as amended
hereby, and this Amendment, except where the failure to have such Governmental
Approvals could not reasonably be expected to have a Material Adverse Effect.

 

5.2           Due Authorization, Non-Contravention, etc.  The execution,
delivery and performance by the Borrower of this Amendment and the consummation
of the transactions contemplated hereby and by the Credit Agreement as amended
by this Amendment, are within the Borrower’s corporate powers, have been duly
authorized by all necessary corporate action, and do not

 

(a)           contravene the Borrower’s Organic Documents;

 

(b)           contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting the Borrower; or

 

(c)           result in, or require the creation or imposition of, any Lien on
any properties of the Borrower.

 

5.3           Governmental Approval, Regulation etc.  No Governmental Approval
or other action by any Governmental Authority is required for the due execution,
delivery or performance by the Borrower of this Amendment or any other Loan
Document to be executed by it, except for the filing of this Agreement with the
SEC as a material document under Rule 601(b)(iv) of
Regulation S-K.

 

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5.4           Validity, etc.  This Amendment and the Credit Agreement as amended
hereby, constitute the legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their respective terms
except as such enforceability is subject to the effect of (i) any applicable
bankruptcy, insolvency, reorganization or similar law relating to or affecting
creditors’ rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law),
including concepts of materiality, reasonableness, good faith and fair dealing.

 

6.             EFFECT OF AMENDMENT.

 

This 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 in
any other document, instrument, agreement or writing shall hereafter be deemed
to refer to the Credit Agreement as amended hereby.

 

7.             GOVERNING LAW, SEVERABILITY, ETC.

 

THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER, GOVERNED BY, AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE NEW YORK. Whenever possible
each provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Amendment
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.

 

THIS WRITTEN AMENDMENT AND THE CREDIT AGREEMENT AS AMENDED BY THIS AMENDMENT
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

8.             MISCELLANEOUS.

 

8.1           Successors and Assigns.  This Amendment shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.

 

8.2           Counterparts.  This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

8.3           NO ORAL AGREEMENTS.  THIS AMENDMENT REPRESENTS 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.

 

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[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

5

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the day and year
first written above.

 

 

POGO PRODUCING COMPANY

 

 

 

 

 

 

 

By:

 

 

Name:

James P. Ulm, II

 

Title:

Senior Vice President and

 

 

Chief Financial Officer

 

 

[Signature Page – Pogo Producing
Company –  Second Amendment
to Credit Agreement]

 

S-1

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BANK OF MONTREAL, acting through its U.S. branches and agencies, including
initially its Chicago, Illinois branch, as Administrative Agent and as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-2

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BANK OF AMERICA, N.A., as a Co-Syndication
Agent and as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-3

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TORONTO DOMINION (TEXAS) LLC, as a
Co-Syndication Agent and as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-4

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BNP PARIBAS, as a Co-Syndication Agent and as
a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-5

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WACHOVIA BANK, NATIONAL
ASSOCIATION, as Documentation Agent and as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-6

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CITIBANK, N.A., as a Managing Agent and as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-7

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THE BANK OF NOVA SCOTIA, as a Managing
Agent and as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

SCOTIABANC INC., as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-8

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THE BANK OF NEW YORK, as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-9

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FORTIS CAPITAL CORP., as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-10

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THE BANK OF TOKYO - MITSUBISHI UFJ,
LTD., formerly known as UFJ Bank, as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-11

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UNION BANK OF CALIFORNIA, N.A., as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-12

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THE ROYAL BANK OF SCOTLAND plc, as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-13

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SOCIETE GENERALE, as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-14

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U.S. BANK NATIONAL ASSOCIATION, as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-15

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COMERICA BANK, as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-16

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SUNTRUST BANK, as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-17

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COMPASS BANK, as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-18

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NATEXIS BANQUES POPULAIRES, as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-19

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MIZUHO CORPORATE BANK, LTD., as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-20

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WELLS FARGO BANK, N.A., as a Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-21

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AMEGY BANK NATIONAL ASSOCIATION,
successor to Southwest Bank of Texas, N.A., as a
Lender

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

S-22

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