**Exhibit 4.12**

 

**SIXTH AMENDMENTtoCREDIT AGREEMENT**

** **

**by**and among

** **

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

**and**COMPASS BANK, as Bank

** **

This Sixth Amendment (“SixthAmendment”) to that certain Credit Agreement dated July 17, 2002originally by and among **WHITTIER ENERGYCOMPANY**, a Nevada corporation (“Whittier Energy”), **WHITTIER OPERATING, INC.**, a Texascorporation (“Whittier Operating”) and **COMPASSBANK**, an Alabama state chartered bank (the “Bank”) is enteredinto this        day of November 2004, byand among Whittier Energy, Whittier Operating, and **OLYMPICRESOURCES (ARIZONA) LTD.,**an Arizona corporation (collectively “Borrower”),**WHITTIER ENERGY CORPORATION,** a Nevadacorporation (“Parent Company”) and Bank.

 

**W I T N E S S E T H:**

 

Whereas, Borrower andBank entered into that certain Credit Agreement dated July 17, 2002,as amended by the First Amendment thereto dated March 10, 2003, the SecondAmendment thereto dated September 9, 2003, the Third Amendment theretodated 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 andParent Company have requested that Bank amend the Credit Agreement and Bank hasagreed to such amendments to the Credit Agreement subject to the terms andconditions set forth herein.

 

NOW, THEREFORE, inconsideration of the mutual promises herein contained, and for other good andvaluable consideration, the receipt and sufficiency of which are acknowledgedby Borrower and Bank, and each intending to be legally bound hereby, theparties agree as follows:

 

# I.                                         SpecificAmendments to Credit Agreement.

#  

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

 

# “Borrower” means, collectively, Whittier Energy Company, aNevada corporation, Whittier Operating, Inc., a Texas corporation, and OlympicResources (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 faceamount of $15,000,000.00, dated effective July 17, 2002, made by Borrowerpayable to the order of Bank, in the form attached as Exhibit “A” to theSixth Amendment, together with all deferrals, renewals, extensions, amendments,modifications or rearrangements thereof, which promissory note shall evidencethe advances to Borrower by Bank pursuant to Section 2.01 hereof,and which note amends, restates, renews, extends, and rearranges, but does notextinguish, the indebtedness evidence by that certain note originally executedon 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 CreditParties on a consolidated basis exclusive of (a) those assets classified asintangible, including, without limitation, goodwill, patents, trademarks, tradenames, copyrights, franchises and deferred charges, (b) treasury stock andminority interests in any Person, (c) cash set apart and held in a sinking orother analogous fund established for the purpose of redemption or otherretirement of capital stock, (d) to the extent not already deducted from totalassets, allowances for depreciation, depletion, obsolescence and/oramortization of properties, uncollectible accounts, and contingent but probableliabilities as to which an amount can be established, (e) all assets arisingfrom advances to any partners, managers, officers, former officers or salesrepresentatives of any Credit Party made outside of the ordinary course ofbusiness, (f) unrealized gains or losses attributable to any Credit Party’sownership of Securities in any Person as of the date of Closing and (g)unrealized gains or losses accounted for in accordance with FinancialAccounting Standard 133 relating to Hedging Transactions; less totalliabilities of the Credit Parties; all of the above being determined inaccordance with GAAP.

#  

#  Article I of the Credit Agreementis hereby further amended by adding thereto, in alphabetical order among theexisting defined terms therein, the following defined terms:

#  

# “Credit Parties” means, collectively, Borrower and ParentCompany.

#  

# “SixthAmendment” means the Sixth Amendment to this Agreement executed by Borrowerand Bank on November    , 2004.

#  

Section 2.01 of the Credit Agreement is hereby amendedby adding the following text after the last grammatical paragraph of suchSection:

 

# Whittier Operating, Inc., and Olympic Resources (Arizona) Ltd., eachhereby appoints Whittier Energy Company as its agent and attorney-in-fact forpurposes of submitting to Bank each Request for Advance permitted to besubmitted under this Agreement and for purposes of receiving each Loan advancehereunder, hereby ratifying, adopting, and confirming all that said WhittierEnergy 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 bedeemed irrevocable until all Obligations of the Borrower to Bank under thisAgreement have been fully repaid and performed, as applicable, and allobligations of the Bank to make advances to Borrower under this Agreement haveterminated.  Each advance of a Loan byBank to Borrower hereunder shall be deemed to have been made jointly to eachBorrower, and each Borrower shall be jointly and severally liable for repaymentthereof.

#  

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

#  

Eachof the Credit Parties covenant, so long as any Indebtedness of Borrower to Bankremains unpaid under this Agreement or Bank remains obligated to make advanceshereunder, that: Borrower shall do, and Parent Company shall cause Borrower todo, the following; and Parent Company shall do each of the following thatrelates specifically to Parent Company:

 

Article V of the Credit Agreement is hereby furtheramended by replacing Sections 5.28, 5.29, and 5.30 thereof in their entiretywith the following:

 

5.28                           TangibleNet Worth Requirements.  The Credit Parties shall maintain a totalTangible 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 consolidatedbasis during all quarterly periods subsequent to June 30, 2004, and (b)one hundred percent (100%) of any increases in shareholders’ equity resultingfrom the sale or issuance of equity interests in any of the Credit Parties on aconsolidated basis during any quarterly period subsequent to June 30,2004.

 

5.29                           EBITDAXto Interest Expense Ratio.  TheCredit Parties will maintain (calculated on a consolidated basis in accordancewith GAAP) a ratio of quarterly EBITDAX to quarterly Interest Expense of notless 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 calculatingthis ratio:

 

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

 

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

 

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

 

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

 

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

 

Withoutthe prior written consent of Bank and so long as any part of the principal orinterest on the Note shall remain unpaid or Bank remains obligated to makeadvances hereunder, Borrower and its Subsidiaries will not, and Parent Companyshall cause Borrower and its Subsidiaries not to:

 

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

 

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

 

# II.                                     ConditionsPrecedent in Connection with the Sixth Amendment.  The obligation of Bank to enter into theSixth Amendment is subject to satisfaction of the following conditionsprecedent:

#  

### (a)     Receipt of Sixth Amendment.  Bank shall have received multiplecounterparts of the Sixth Amendment, as requested by Bank, duly executed byeach Borrower and by Parent Company.

###  

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

###  

### (c)     Accuracy ofRepresentations and Warranties and No Event of Default.  The representations and warranties containedin Article IV of the Credit Agreement shall be true and correct in allmaterial respects on the date of the Sixth Amendment with the same effect asthough such representations and warranties had been made on such date; and noEvent of Default shall have occurred and be continuing.

###  

### (d)    Legal Matters Satisfactoryto Special Counsel to Bank.  Alllegal matters incident to the consummation of the transactions contemplated bythe 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 haveoccurred since the date of the Credit Agreement in the condition, financial orotherwise, of Borrower.

 

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# III.                                 Reaffirmationof Representations and Warranties. To induce Bank to enter into this Sixth Amendment, each Borrower herebyreaffirms, ratifies, adopts, and confirms, as of the date hereof, itsrepresentations and warranties contained in Article IV of the CreditAgreement and in all other documents executed pursuant thereto, and eachBorrower and Parent Company, respectively, additionally represents and warrantsas follows:

#  

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

###  

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

###  

### (c)     The Credit Agreement asamended 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 accordancewith its terms, subject as to enforcement only to bankruptcy, insolvency,reorganization, moratorium or other similar laws affecting the enforcement ofcreditors’ rights generally.  The otherLoan Documents to which Parent Company is a party represent and will representthe legal, valid and binding obligations of Parent Company, enforceable againstParent Company in accordance with their terms, subject as to enforcement onlyto bankruptcy, insolvency, reorganization, moratorium or other similar laws affectingthe enforcement of creditors’ rights generally.

###  

### (d)    No Event of Default orUnmatured Event of Default has occurred and is continuing as of the datehereof.

###  

# IV.                                 DefinedTerms.  Except as amended hereby,terms used herein that are defined in the Credit Agreement shall have the samemeanings in this Sixth Amendment.

#  

# V.                                     Reaffirmationof Credit Agreement.  This SixthAmendment shall be deemed to be an amendment to the Credit Agreement, and theCredit Agreement, as hereby amended, is hereby ratified, approved and confirmedin each and every respect.  Allreferences to the Credit Agreement herein and in any other document,instrument, agreement or writing shall hereafter be deemed to refer to theCredit Agreement as amended hereby.

 

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

#  

# VII.                             GoverningLaw.  THIS SIXTH AMENDMENT SHALL BEGOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS ANDTHE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.  This Sixth Amendment has been entered into inHarris County, Texas, and it shall be performable for all purposes in HarrisCounty, Texas.  Courts within the Stateof Texas shall have jurisdiction over any and all disputes between Borrower andBank, whether in law or equity, including, but not limited to, any and alldisputes arising out of or relating to this Sixth Amendment or any other LoanDocument; and venue in any such dispute whether in federal or state court shallbe laid in Harris County, Texas.

#  

# VIII.                         Severability.  Whenever possible each provision of thisSixth Amendment shall be interpreted in such manner as to be effective andvalid under applicable law, but if any provision of this Sixth Amendment shallbe prohibited by or invalid under applicable law, such provision shall beineffective to the extent of such prohibition or invalidity, withoutinvalidating the remainder of such provision or the remaining provisions ofthis Sixth Amendment.

#  

# IX.                                Executionin Counterparts.  Each party heretoacknowledges that this Agreement may be executed in several counterparts byeach party at different times and in different locations; that each separatecounterpart bearing the signature of any party may be effectively delivered tothe other parties by the delivery of an electronic facsimile sent viatelecopier; that each party so delivering any such counterpart shall be boundby its facsimile signature thereon; and that the signature pages fromcounterparts signed by each party may be collated into one or more copies ofthis agreement, which shall constitute one and the same agreement among allparties hereto.

#  

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

#  

# XI.                                Successorsand Assigns.  This Sixth Amendmentshall be binding upon Borrower and Bank and their respective successors andassigns, and shall inure to the benefit of Borrower and Bank, and therespective successors and assigns of Bank.

#  

# XII.                            Non-Applicationof Chapter 346 of Texas Finance Codes. In no event shall Chapter 346 of the Texas Finance Code (which regulatescertain revolving loan accounts and revolving tri-party accounts) apply to thisCredit Agreement as hereby amended or any other Loan Document or thetransactions contemplated hereby.

#  

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

 

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

#  

IN WITNESS WHEREOF, theparties hereto have caused this Sixth Amendment to be effective as of the dayand 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 |
|        |                                       |                         |  |  |

 

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|   | **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 hereinafterprescribed, for value received,**WHITTIERENERGY 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, Suite1400A, Houston, Harris County, Texas 77046, (i) the principal amount of FIFTEENMILLION AND NO/100 DOLLARS ($15,000,000.00) or the principal amount advancedpursuant to the terms of the Credit Agreement (defined herein) as of the dateof maturity hereof, whether by acceleration or otherwise, whichever may be thelesser, and (ii) interest on the principal balance from time to time advancedand remaining unpaid from the date of the advance until the “Maturity Date” ata rate of interest equal to the lesser of (a) the “Floating Rate,” calculatedon the basis of a year of 365 or 366 days, as the case may be, and for theactual number of days elapsed (including the first day but excluding the lastday), or (b) the “Maximum Rate.”  Anyincrease or decrease in interest rate resulting from a change in the MaximumRate shall be effective immediately when such change becomes effective, withoutnotice to Borrower, unless “Applicable Law” requires that such increase ordecrease not be effective until a later time, in which event such increase ordecrease shall be effective at the earliest time permitted under the provisionsof such law.

 

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

 

This Note is issued pursuantto the Credit Agreement.  Reference ishereby made to the Credit Agreement for a statement of the rights andobligations of the holder of this Note and the duties and obligations ofBorrower in relation thereto; but neither this reference to the CreditAgreement nor any provisions thereof shall affect or impair the absolute andunconditional obligation of Borrower to pay any outstanding and unpaidprincipal of and interest on this Note when due, in accordance with the termsof the Credit Agreement.  Each advanceand each payment made pursuant to this Note shall be reflected by notationsmade by Bank on its records and the aggregate unpaid amounts of principal andinterest reflected by the notations on the records of Bank shall be deemedrebuttably presumptive evidence of the principal amount owing under this Note.

 
|   |               |   |
|--------|--------------------|--------|
|   | Intial of Borrower |   |

 

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

 

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

 

Except as may be expresslyprovided in the Credit Agreement, Borrower and all sureties, endorsers andguarantors of this Note waive demand, presentment for payment, notice ofnonpayment, protest, notice of protest, notice of intent to acceleratematurity, notice of acceleration of maturity, and all other notices, filing ofsuit and diligence in collecting this Note or enforcing any of the securityherefor, and agree to any substitution, exchange or release of any suchsecurity or the release of any party primarily or secondarily liable hereon andfurther agree that it will not be necessary for Bank, in order to enforcepayment of this Note by them, to first institute suit or exhaust its remediesagainst any Borrower or others liable herefor, or to enforce its rights againstany security herefor, and consent to any one or more extensions orpostponements of time of payment of this Note on any terms or any otherindulgences with respect hereto, without notice thereof to any of them.  Bank may transfer this Note, and the rightsand privileges of Bank under this Note shall inure to the benefit of Bank’srepresentatives, successors or assigns.

 

[the remainder ofthis page is intentionally left blank]

 

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

 

Executedthis     day of November 2004, effective as of the 17th dayof 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 |   |
|        |                                   |  |  |  |

 

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