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EXHIBIT 10.1.4
[NORWEST BANK LETTERHEAD]
March 29, 1999
Xx.Xxxxxx Xxxxxxx
Mr. Xxxxx Xxxxx
Chief Financial Officer
Xxxxxxxxx Energy, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxx, XX 00000
RE: NON-COMPLIANCE WITH LOAN AGREEMENT DATED DECEMBER 9, 1997 (AMENDED
MARCH 26, 1998)
REPLACEMENT OF NET INCOME COVENANT WITH EBITDA/INTEREST COVERAGE
COVENANT
Dear Xxxxxx and Xxxxx:
In accordance with the Loan Agreement between Xxxxxxxxx Energy, Inc. (Borrower).
and Norwest Bank Texas, N.A. (Lender), this letter shall serve as formal
acknowledgment by Xxxxxx and notification to all parties that Borrower is not in
compliance with Article 6.22 (Net Income Covenant) of said Loan Agreement.
For the period ending 12/31/98 only, Xxxxxx agrees to waive the subject
performance requirement provided that the Borrower has fully satisfied its
payment obligations under the terms of its note for both the February 1st and
March 1st, 1999 note payments. Such waiver does not preclude the Lender from
exercising any right or remedy in the future. It is the Lender's intention for
Borrower to be in full compliance with all provisions of the Loan Agreement.
Since it is likely that this covenant may not be met in March of this year, we
would offer to modify the covenant in the following manner:
Article 6.22 will be deleted.
Article 6.26 will be added reflecting that the borrower will maintain its ratio
of Earnings Before Interest Expense, Taxes, Depreciation, Depletion and
Amortization to Interest Expense of at least 2.25x to 1.00 (measured on a
quarterly basis).
The company will agree to provide a pledge of its oil and gas properties (or a
mutually agreeable indirect pledge of its oil and gas properties).
The company will agree to provide financial information on a monthly basis (loan
agreement monitoring will remain quarterly).
Upon receipt and review of the Borrower's quarter-end financial statements for
the period ending March 31, 1999, Xxxxxx will notify Borrower of any provision
of the loan agreement that is out of compliance and any action that the Bank
will be taking.
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Xxxxxxxxx Energy, Inc.
Net Income Covenant Waiver
Page 2
March 29, 1999
If you have any questions relating to this letter, please contact me at
940/000-0000.
Sincerely,
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
Business Banking Manager
ACKNOWLEDGED AND ACCEPTED THIS 29TH DAY OF MARCH, 1999.
XXXXXXXXX ENERGY, INC.
BY: /s/ XXXXXX XXXXXXX
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XXXXXX XXXXXXX, CHAIRMAN OF THE BOARD
AND CHIEF EXECUTIVE OFFICER
XXXXXXXXX DRILLING COMPANY
AS GUARANTOR
BY: /s/ XXXXX X. XXXXX
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XXXXX X. XXXXX
CHIEF FINANCIAL OFFICER
XXXXXXXXX PETROLEUM, INC.
AS GUARANTOR
BY: /s/ XXXXX X. XXXXX
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XXXXX X. XXXXX
CHIEF FINANCIAL OFFICER
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Xxxxxxxxx Energy, Inc.
Net Income Covenant Waiver
Page 3
March 29, 1999
XXXXXXXXX PETROLEUM TRADING COMPANY, INC.
AS GUARANTOR
BY: /s/ XXXXX X. XXXXX
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XXXXX X. XXXXX
CHIEF FINANCIAL OFFICER
CC: XXXXXXX XXXXX - BANK ONE
XXXXX XXXXXXXXX - BANK OF OKLAHOMA
