Exhibit 4.12


 


SIXTH AMENDMENT

to

CREDIT AGREEMENT


 


by
and among


 


WHITTIER ENERGY COMPANY, WHITTIER
OPERATING, INC., and OLYMPIC RESOURCES
(ARIZONA) LTD.,  collectively as Borrower,
and WHITTIER ENERGY CORPORATION, as Parent Company,


and

COMPASS BANK, as Bank


 


This Sixth Amendment (“Sixth
Amendment”) to that certain Credit Agreement dated July 17, 2002
originally by and among WHITTIER ENERGY
COMPANY, a Nevada corporation (“Whittier Energy”), WHITTIER OPERATING, INC., a Texas
corporation (“Whittier Operating”) and COMPASS
BANK, an Alabama state chartered bank (the “Bank”) is entered
into this        day of November 2004, by
and among Whittier Energy, Whittier Operating, and OLYMPIC
RESOURCES (ARIZONA) LTD., an Arizona corporation (collectively “Borrower”),
WHITTIER ENERGY CORPORATION, a Nevada
corporation (“Parent Company”) and Bank.


 


W I T N E S S E T H:


 


Whereas, Borrower and
Bank entered into that certain Credit Agreement dated July 17, 2002,
as amended by the First Amendment thereto dated March 10, 2003, the Second
Amendment thereto dated September 9, 2003, the Third Amendment thereto
dated April 15, 2004, the Fourth Amendment thereto dated May 12,
2004, and the Fifth Amendment thereto dated June 22, 2004 (as amended, the
“Credit Agreement”).


 


Whereas, Borrower and
Parent Company have requested that Bank amend the Credit Agreement and Bank has
agreed to such amendments to the Credit Agreement subject to the terms and
conditions set forth herein.


 


NOW, THEREFORE, in
consideration of the mutual promises herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are acknowledged
by Borrower and Bank, and each intending to be legally bound hereby, the
parties agree as follows:


 


I.                                         Specific
Amendments to Credit Agreement.


 


Article I of the Credit Agreement is hereby amended
by revising the following defined terms in their entirety to read as follows:


 


“Borrower” means, collectively, Whittier Energy Company, a
Nevada corporation, Whittier Operating, Inc., a Texas corporation, and Olympic
Resources (Arizona) Ltd., an Arizona corporation.


 


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“Maturity Date”
means October 1, 2007.


 


“Note”
means that certain reducing revolving promissory note in the original face
amount of $15,000,000.00, dated effective July 17, 2002, made by Borrower
payable to the order of Bank, in the form attached as Exhibit “A” to the
Sixth Amendment, together with all deferrals, renewals, extensions, amendments,
modifications or rearrangements thereof, which promissory note shall evidence
the advances to Borrower by Bank pursuant to Section 2.01 hereof,
and which note amends, restates, renews, extends, and rearranges, but does not
extinguish, the indebtedness evidence by that certain note originally executed
on July 17, 2002, by Whittier Energy Company and Whittier Operating, Inc.,
in the form originally attached as Exhibit A to this Agreement.


 


“Tangible Net Worth” means the total assets of the Credit
Parties on a consolidated basis exclusive of (a) those assets classified as
intangible, including, without limitation, goodwill, patents, trademarks, trade
names, copyrights, franchises and deferred charges, (b) treasury stock and
minority interests in any Person, (c) cash set apart and held in a sinking or
other analogous fund established for the purpose of redemption or other
retirement of capital stock, (d) to the extent not already deducted from total
assets, allowances for depreciation, depletion, obsolescence and/or
amortization of properties, uncollectible accounts, and contingent but probable
liabilities as to which an amount can be established, (e) all assets arising
from advances to any partners, managers, officers, former officers or sales
representatives of any Credit Party made outside of the ordinary course of
business, (f) unrealized gains or losses attributable to any Credit Party’s
ownership of Securities in any Person as of the date of Closing and (g)
unrealized gains or losses accounted for in accordance with Financial
Accounting Standard 133 relating to Hedging Transactions; less total
liabilities of the Credit Parties; all of the above being determined in
accordance with GAAP.


 


 Article I of the Credit Agreement
is hereby further amended by adding thereto, in alphabetical order among the
existing defined terms therein, the following defined terms:


 


“Credit Parties” means, collectively, Borrower and Parent
Company.


 


“Sixth
Amendment” means the Sixth Amendment to this Agreement executed by Borrower
and Bank on November    , 2004.


 


Section 2.01 of the Credit Agreement is hereby amended
by adding the following text after the last grammatical paragraph of such
Section:


 


Whittier Operating, Inc., and Olympic Resources (Arizona) Ltd., each
hereby appoints Whittier Energy Company as its agent and attorney-in-fact for
purposes of submitting to Bank each Request for Advance permitted to be
submitted under this Agreement and for purposes of receiving each Loan advance
hereunder, hereby ratifying, adopting, and confirming all that said Whittier
Energy Company has done or may hereafter do pursuant to said power of


 


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attorney. 
This appointment is a power coupled with an interest, and shall be
deemed irrevocable until all Obligations of the Borrower to Bank under this
Agreement have been fully repaid and performed, as applicable, and all
obligations of the Bank to make advances to Borrower under this Agreement have
terminated.  Each advance of a Loan by
Bank to Borrower hereunder shall be deemed to have been made jointly to each
Borrower, and each Borrower shall be jointly and severally liable for repayment
thereof.


 


Article V of the Credit Agreement is hereby amended
replacing the preamble thereof in its entirety with the following text:


 


Each
of the Credit Parties covenant, so long as any Indebtedness of Borrower to Bank
remains unpaid under this Agreement or Bank remains obligated to make advances
hereunder, that: Borrower shall do, and Parent Company shall cause Borrower to
do, the following; and Parent Company shall do each of the following that
relates specifically to Parent Company:


 


Article V of the Credit Agreement is hereby further
amended by replacing Sections 5.28, 5.29, and 5.30 thereof in their entirety
with the following:


 


5.28                           Tangible
Net Worth Requirements.  The Credit Parties shall maintain a total
Tangible Net Worth of not less than $7,300,000.00, plus: (a) fifty percent
(50%) of net income (excluding losses) of the Credit Parties on a consolidated
basis during all quarterly periods subsequent to June 30, 2004, and (b)
one hundred percent (100%) of any increases in shareholders’ equity resulting
from the sale or issuance of equity interests in any of the Credit Parties on a
consolidated basis during any quarterly period subsequent to June 30,
2004.


 


5.29                           EBITDAX
to Interest Expense Ratio.  The
Credit Parties will maintain (calculated on a consolidated basis in accordance
with GAAP) a ratio of quarterly EBITDAX to quarterly Interest Expense of not
less than three-to-one (3.00:1.00). 
Compliance with this covenant shall begin with the quarter ending September 30,
2004.  For the purposes of calculating
this ratio:


 


(a)                                  “EBITDAX”
shall be defined as the sum of net income before interest expenses, taxes,
depreciation, depletion, amortization, exploration costs and other non-cash
expenses less non-cash income and less any capitalized expenses, and


 


(b)                                 “Interest
Expense” shall be defined as the sum of all cash interest amounts (including
any capitalized interest payments) required to be paid during such quarter on
all of the Credit Parties’ Indebtedness including, but not limited to, the
Indebtedness evidenced by the Note.


 


5.30                           Current
Ratio.  The Credit Parties shall
maintain a ratio of Current Assets to Current Liabilities (each defined on a
consolidated basis in accordance with GAAP) of at least one-to-one (1.00:1.00),
determined quarterly beginning


 


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with
the quarter ending September 30, 2004. 
For purposes of this ratio, Current Assets shall include unused availability
under the Revolving Commitment but shall exclude assets accounted for in
accordance with Financial Accounting Standards 133 under GAAP and Current
Liabilities shall exclude current maturities of the Loans and any liabilities
accounted for in accordance with Financial Accounting Standards 133 under GAAP.


 


Article VI of the Credit Agreement is hereby amended
replacing the preamble thereof in its entirety with the following text:


 


Without
the prior written consent of Bank and so long as any part of the principal or
interest on the Note shall remain unpaid or Bank remains obligated to make
advances hereunder, Borrower and its Subsidiaries will not, and Parent Company
shall cause Borrower and its Subsidiaries not to:


 


Article VI of the Credit Agreement is hereby further
amended by replacing each reference to the term “Borrower” in Sections 6.01
through 6.10, 6.12, and 6.13 thereof with the words “any Credit Party”.


 


Section 7.01 of the Credit Agreement is hereby amended
by replacing each reference to the term “Borrower” in subsections (c), (d), and
(f) through (i) thereof with the words “any Credit Party”.


 


II.                                     Conditions
Precedent in Connection with the Sixth Amendment.  The obligation of Bank to enter into the
Sixth Amendment is subject to satisfaction of the following conditions
precedent:


 


(a)     Receipt of Sixth Amendment.  Bank shall have received multiple
counterparts of the Sixth Amendment, as requested by Bank, duly executed by
each Borrower and by Parent Company.


 


(b)    Receipt of Note.  Bank shall have received the Note in the form
attached as Exhibit A to this Sixth Amendment, duly executed by each Borrower.


 


(c)     Accuracy of
Representations and Warranties and No Event of Default.  The representations and warranties contained
in Article IV of the Credit Agreement shall be true and correct in all
material respects on the date of the Sixth Amendment with the same effect as
though such representations and warranties had been made on such date; and no
Event of Default shall have occurred and be continuing.


 


(d)    Legal Matters Satisfactory
to Special Counsel to Bank.  All
legal matters incident to the consummation of the transactions contemplated by
the Sixth Amendment shall be satisfactory to the firm of Porter & Hedges,
L.L.P., special counsel for Bank.


 


(e)     No Material Adverse Change.  No material adverse change shall have
occurred since the date of the Credit Agreement in the condition, financial or
otherwise, of Borrower.


 


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III.                                 Reaffirmation
of Representations and Warranties. 
To induce Bank to enter into this Sixth Amendment, each Borrower hereby
reaffirms, ratifies, adopts, and confirms, as of the date hereof, its
representations and warranties contained in Article IV of the Credit
Agreement and in all other documents executed pursuant thereto, and each
Borrower and Parent Company, respectively, additionally represents and warrants
as follows:


 


(a)     The execution and delivery of
this Sixth Amendment and the performance by Borrower and Parent Company, respectively,
of its obligations under this Sixth Amendment are within such Borrower’s or
Parent Company’s, as applicable, Corporate Power, have been duly authorized by
all necessary Corporate Action, have received all necessary governmental
approval (if any shall be required), and do not and will not contravene or
conflict with any provision of law or of the Governing Documentation of
Borrower or Parent Company, respectively, or of any agreement binding upon
Borrower or Parent Company, respectively.


 


(b)    The execution and delivery of
the other Loan Documents to which Parent Company is a party and the performance
by Parent Company of its obligations under such Loan Documents are and will be
within Parent Company’s Corporate Power, have been duly authorized by all
necessary Corporate Action, have received all necessary governmental approval
(if any shall be required), and do not and will not contravene or conflict with
any provision of law or of the Governing Documentation of Parent Company or of
any agreement binding upon Parent Company.


 


(c)     The Credit Agreement as
amended by this Sixth Amendment, represents the legal,
valid and binding obligations of Borrower and Parent Company, as applicable,
enforceable against Borrower or Parent Company, respectively, in accordance
with its terms, subject as to enforcement only to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors’ rights generally.  The other
Loan Documents to which Parent Company is a party represent and will represent
the legal, valid and binding obligations of Parent Company, enforceable against
Parent Company in accordance with their terms, subject as to enforcement only
to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally.


 


(d)    No Event of Default or
Unmatured Event of Default has occurred and is continuing as of the date
hereof.


 


IV.                                 Defined
Terms.  Except as amended hereby,
terms used herein that are defined in the Credit Agreement shall have the same
meanings in this Sixth Amendment.


 


V.                                     Reaffirmation
of Credit Agreement.  This Sixth
Amendment shall be deemed to be an amendment to the Credit Agreement, and the
Credit Agreement, as hereby amended, 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.


 


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VI.                                 Entire
Agreement.  The Credit Agreement, as
hereby amended, embodies the entire agreement between Borrower and Bank and
supersedes all prior proposals, agreements and understandings relating to the
subject matter hereof.  Borrower
certifies that it is relying on no representation, warranty, covenant or
agreement except for those set forth in the Credit Agreement as hereby amended
and the other documents previously executed or executed of even date herewith.


 


VII.                             Governing
Law.  THIS SIXTH AMENDMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  This Sixth Amendment has been entered into in
Harris County, Texas, and it shall be performable for all purposes in Harris
County, Texas.  Courts within the State
of Texas shall have jurisdiction over any and all disputes between Borrower and
Bank, whether in law or equity, including, but not limited to, any and all
disputes arising out of or relating to this Sixth Amendment or any other Loan
Document; and venue in any such dispute whether in federal or state court shall
be laid in Harris County, Texas.


 


VIII.                         Severability.  Whenever possible each provision of this
Sixth Amendment shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Sixth 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 Sixth Amendment.


 


IX.                                Execution
in Counterparts.  Each party hereto
acknowledges that this Agreement may be executed in several counterparts by
each party at different times and in different locations; that each separate
counterpart bearing the signature of any party may be effectively delivered to
the other parties by the delivery of an electronic facsimile sent via
telecopier; that each party so delivering any such counterpart shall be bound
by its facsimile signature thereon; and that the signature pages from
counterparts signed by each party may be collated into one or more copies of
this agreement, which shall constitute one and the same agreement among all
parties hereto.


 


X.                                    Section Captions.  Section captions used in this Sixth
Amendment are for convenience of reference only, and shall not affect the
construction of this Sixth Amendment.


 


XI.                                Successors
and Assigns.  This Sixth Amendment
shall be binding upon Borrower and Bank and their respective successors and
assigns, and shall inure to the benefit of Borrower and Bank, and the
respective successors and assigns of Bank.


 


XII.                            Non-Application
of Chapter 346 of Texas Finance Codes. 
In no event shall Chapter 346 of the Texas Finance Code (which regulates
certain revolving loan accounts and revolving tri-party accounts) apply to this
Credit Agreement as hereby amended or any other Loan Document or the
transactions contemplated hereby.


 


XIII.                        Notice.  THIS SIXTH AMENDMENT, TOGETHER WITH THE
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY


 


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EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. 
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


IN WITNESS WHEREOF, the
parties hereto have caused this Sixth Amendment to be effective as of the day
and year above written.


 


	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WHITTIER OPERATING, INC.,

  
	
   

  	
  a Texas corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WHITTIER ENERGY COMPANY,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OLYMPIC RESOURCES (ARIZONA) LTD.,

  
	
   

  	
  an Arizona corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARENT COMPANY:

  
	
   

  	
   

  	
   

  
	
   

  	
  WHITTIER ENERGY CORPORATION,

  
	
   

  	
  a Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  
	
   

  	
   

  	
  Chief Financial Officer

  
					



 


7





















 


	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
   

  	
  COMPASS
  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Kathleen J. Bowen

  
	
   

  	
   

  	
  Senior Vice President

  



 


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EXHIBIT A


 


FORM OF


 


AMENDED AND RESTATED REDUCING REVOLVING NOTE


 


	
  $15,000,000.00

  	
   

  	
  Houston, Texas

  	
   

  	
  July 17, 2002

  



 


On the dates hereinafter
prescribed, for value received, WHITTIER
ENERGY COMPANY, a Nevada corporation, and WHITTIER OPERATING,
INC., a Texas corporation, and OLYMPIC RESOURCES
(ARIZONA) LTD., an Arizona corporation (collectively, “Borrower”),
having an address at 333 Clay Street, Suite 1100, Houston, Texas 77002,
promises to pay to the order of COMPASS BANK
(herein called “Bank”), at its principal offices at 24 Greenway Plaza, Suite
1400A, Houston, Harris County, Texas 77046, (i) the principal amount of FIFTEEN
MILLION AND NO/100 DOLLARS ($15,000,000.00) or the principal amount advanced
pursuant to the terms of the Credit Agreement (defined herein) as of the date
of maturity hereof, whether by acceleration or otherwise, whichever may be the
lesser, and (ii) interest on the principal balance from time to time advanced
and remaining unpaid from the date of the advance until the “Maturity Date” at
a rate of interest equal to the lesser of (a) the “Floating Rate,” calculated
on the basis of a year of 365 or 366 days, as the case may be, and for the
actual number of days elapsed (including the first day but excluding the last
day), or (b) the “Maximum Rate.”  Any
increase or decrease in interest rate resulting from a change in the Maximum
Rate shall be effective immediately when such change becomes effective, without
notice to Borrower, unless “Applicable Law” requires that such increase or
decrease not be effective until a later time, in which event such increase or
decrease shall be effective at the earliest time permitted under the provisions
of such law.


 


All capitalized terms used
herein, which are not defined herein, including, but not limited to, the terms
Applicable Law, Floating Rate, Maturity Date, Maximum Rate and Security
Instruments shall be defined as set forth in the Credit Agreement between
Borrower and Bank dated of even date with this Note (the “Credit Agreement”).


 


This Note is issued pursuant
to the Credit Agreement.  Reference is
hereby made to the Credit Agreement for a statement of the rights and
obligations of the holder of this Note and the duties and obligations of
Borrower in relation thereto; but neither this reference to the Credit
Agreement nor any provisions thereof shall affect or impair the absolute and
unconditional obligation of Borrower to pay any outstanding and unpaid
principal of and interest on this Note when due, in accordance with the terms
of the Credit Agreement.  Each advance
and each payment made pursuant to this Note shall be reflected by notations
made by Bank on its records and the aggregate unpaid amounts of principal and
interest reflected by the notations on the records of Bank shall be deemed
rebuttably presumptive evidence of the principal amount owing under this Note.


 


	
   

  	
   

  	
   

  
	
   

  	
  Intial of Borrower

  	
   

  



 


1





















 


This Note is a revolving
credit note and it is contemplated that by reason of prepayments hereon there
may be times when no indebtedness is owing hereunder; but notwithstanding such
occurrence, this Note shall remain valid and in full force and effect as to
each principal advance made hereunder subsequent to each such occurrence.


 


This Note is secured by all
security agreements, collateral assignments, mortgages and lien instruments executed
by Borrower (or by any other party) in favor of Bank or its predecessors,
including the Security Instruments executed simultaneously herewith, those
executed heretofore and those hereafter executed.


 


Except as may be expressly
provided in the Credit Agreement, Borrower and all sureties, endorsers and
guarantors of this Note waive demand, presentment for payment, notice of
nonpayment, protest, notice of protest, notice of intent to accelerate
maturity, notice of acceleration of maturity, and all other notices, filing of
suit and diligence in collecting this Note or enforcing any of the security
herefor, and agree to any substitution, exchange or release of any such
security or the release of any party primarily or secondarily liable hereon and
further agree that it will not be necessary for Bank, in order to enforce
payment of this Note by them, to first institute suit or exhaust its remedies
against any Borrower or others liable herefor, or to enforce its rights against
any security herefor, and consent to any one or more extensions or
postponements of time of payment of this Note on any terms or any other
indulgences with respect hereto, without notice thereof to any of them.  Bank may transfer this Note, and the rights
and privileges of Bank under this Note shall inure to the benefit of Bank’s
representatives, successors or assigns.


 


[the remainder of
this page is intentionally left blank]


 


2





















 


This note amends, restates,
renews, extends, and rearranges, but does not extinguish, the indebtedness
originally evidenced by that certain note executed on July 17, 2002, by
Whittier Energy Company and Whittier Operating, Inc., in the original face
amount of $15,000,000.00, made payable to the order of Bank


 


Executed
this     day of November 2004, effective as of the 17th day
of July 2002.


 


	
   

  	
  WHITTIER OPERATING, INC.,

  
	
   

  	
  a Texas corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WHITTIER ENERGY COMPANY,

  
	
   

  	
  a Nevada corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  OLYMPIC RESOURCES (ARIZONA) LTD.,

  
	
   

  	
  an Arizona corporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Michael B. Young

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer