Exhibit 4.2
October 16, 1998
Xx. Xxxxxx Xxxxxxxxx
Chief Financial Officer
Xxxxxxxx Petroleum Corporation
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000-0000
Re: Credit Agreement by and between Xxxxxxx Petroleum Corporation of
Michigan ("Borrower") and Compass Bank-Houston ("Lender"), dated August
16, 1995 (as subsequently amended, restated or supplemented, the
"Credit Agreement").
Dear Xxxxxx:
Pursuant to Section 2.7(b) of the Credit Agreement, Lender has increased the
Borrowing Base applicable to the Borrower's Revolving Line of Credit to a level
of $31,000,000, effective upon the preparation and execution of appropriate
documentation. Subject to the terms and conditions of the Credit Agreement
(including Sections 2.7(b)(c)(d)), this Borrowing Base shall remain in effect
until the next Borrowing Base review date, which is currently scheduled for
January 1, 1999.
In addition, effective upon your acknowledgement of this letter, Section 6.11 of
the Credit Agreement shall be amended to read as follows:
"6.11 Consolidated Tangible Net Worth. Permit Consolidated Tangible Net
Worth at any time to be less than $6,000,000 plus, for all fiscal
quarters ending on or after September 30, 1998, 50% of positive
Consolidated Net Income and 100% of all cash equity proceeds."
Please note that all capitalized terms used but not defined herein shall have
the meanings attributed thereto in the Credit Agreement.
Please acknowledge your agreement and acceptance of the foregoing by initialing
page one of this document and executing page two in the space provided below.
Kindly return the signed original to my attention at the address indicated
below, along with a check in the amount of $12,5000, which represents a facility
fee pursuant to Section 2.10 of the Credit Agreement. In the interim, I would
appreciate it if you would forward a copy of the executed document to my
attention via facsimile at (000) 000-0000.
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Page Two
Sincerely,
COMPASS BANK - HOUSTON
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Xxxxxxx Xxxxxx
Vice President
AGREED TO AND ACCEPTED AS OF THIS 16TH DAY OF OCTOBER, 1998:
XXXXXXXX PETROLEUM COMPANY OF LOUISIANA
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------------
Xxxxxx X. Xxxxxxxxx
Chief Financial Officer
XXXXXXXX PETROLEUM CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxxx
Chief Financial Officer
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