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EXHIBIT 6.4
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement ("Amendment") is entered into
between Compass Bank, an Alabama state bank, (the "Lender") and Trek Resources,
Inc., a Utah corporation, (the "Borrower") and is dated as of February 12, 2001.
Terms defined in the Credit Agreement between the Lender and the Borrower, under
its previous name, XxXxxxx Resources Company, Inc., dated December 24, 1997, as
amended (the "Credit Agreement"), are used herein as therein defined, unless
otherwise defined herein or the context otherwise requires.
RECITALS:
WHEREAS, the Borrower has requested that the Lender amend the Credit
Agreement; and
WHEREAS, certain of the amendments contained in this Amendment were
effected by letters dated January 22, 2001, and February 12, 2001 (the
"Letters") from the Lender to the Borrower and are restated herein; and
WHEREAS, the Letters contain various waivers of Defaults and specify
the engineering and facility fees due in connection with such Letters and this
Amendment; and
WHEREAS, the Lender is willing to amend the Credit Agreement under the
terms and conditions set forth herein;
NOW, THEREFORE, the Borrower and the Lender hereby agree as follows:
1. The following definitions are hereby added to Section 1.1 of the
Credit Agreement as follows:
"Third Amendment to Credit Agreement" means the Third
Amendment to Credit Agreement dated February 12, 2001, between the Lender and
the Borrower.
2. The definition of "Note" and "Revolving Credit Period" in Section
1.1 of the Credit Agreement is hereby amended and restated in its entirety as
follows:
"Note" means the Promissory Note of the Borrower (and any
renewal or extension thereof) evidencing the obligations of Borrower to repay
the Loans, substantially in the form attached to the Third Amendment to Credit
Agreement, in title "Form of Promissory Note", with appropriate insertions,
which note is in replacement and renewal of the Prior Note.
"Prior Note" means the promissory note of the Borrower dated
December 24, 1997, in the amount of $10,000,000, issued to the Lender.
"Revolving Credit Period" means the period commencing on the
Closing Date and ending June 1, 2003 (the "Revolving Credit Termination Date").
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3. The Borrowing Base shall be $10,500,000 as of February 12, 2001, and
the amount by which the Borrowing Base shall automatically be reduced on March
1, 2001, and on the first day of each month thereafter shall be $100,000 per
month; until each is redetermined in accordance with the Credit Agreement. All
principal outstanding under the Note shall be due and payable on the Revolving
Credit Termination Date (or such earlier date as required by the Credit
Agreement) together with all accrued, unpaid interest on the Note.
4. Section 7.2(a)(i) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(a)(i) as soon as available and in any event within 120
days after the end of each fiscal year of the Borrower, copies of the balance
sheet of the Borrower as of the end of such fiscal year, and copies of the
related statements of operations or income, stockholders' equity or retained
earnings, and cash flow for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP, and audited by a firm of independent
certified public accountants acceptable to the Lender;"
5. Section 7.2(a)(iv) of the Credit Agreement, providing for the
delivery of tax returns, is hereby deleted in its entirety.
6. Section 7.15(b) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(b) Net Worth. The Borrower will not permit Tangible Net
Worth to be less at any time than $1,100,000 plus 50% of positive Net Income for
all fiscal periods ending subsequent to September 30, 2000, plus 100% of any
Equity Infusions occurring subsequent to September 30, 2000.
"Net Income" means, for any period, the net income of the
Borrower for such period, determined in accordance with GAAP.
"Tangible Net Worth" means, (a) total assets, as would be
reflected on a balance sheet of the Borrower prepared in accordance with GAAP,
exclusive of Intellectual Property, experimental or organization expenses,
franchises, licenses, permits, and other Intangible assets, treasury stock,
unamortized underwriters' debt discount and expenses, goodwill and amounts due
from officers, directors and shareholders of the Borrower minus (b) total
liabilities, as would be reflected on a balance sheet of the Borrower prepared
in accordance with GAAP."
7. The Borrower shall execute such amendments to mortgages and other
security instruments as the Lender may from time to time reasonably request to
amend the existing mortgages and other security instruments to reflect the terms
of this Amendment.
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8. The addresses of the Borrower and the Lender under Section 9.6 of
the Credit Agreement are those specified on the signature page of this
Amendment.
9. Section 9.10 of the Credit Agreement is hereby amended and restated
in its entirety as follows:
"SECTION 9.10. APPLICABLE LAW; VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT HAS BEEN NEGOTIATED, IS BEING EXECUTED AND
DELIVERED, AND WILL BE PERFORMED IN WHOLE OR IN PART, IN THE STATE OF TEXAS, AND
THE SUBSTANTIVE LAWS OF SUCH STATE AND THE APPLICABLE FEDERAL LAWS OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THE LOAN DOCUMENTS, EXCEPT TO THE EXTENT THE LAWS OF ANY
JURISDICTION WHERE COLLATERAL IS LOCATED REQUIRE APPLICATION OF SUCH LAWS WITH
RESPECT TO SUCH COLLATERAL.
(b) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT
SITTING IN HOUSTON, XXXXXX COUNTY, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE LENDER OR ANY AFFILIATE OF THE LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN HOUSTON, XXXXXX COUNTY,
TEXAS.
(c) THE BORROWER AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, IRREVOCABLY, AND UNCONDITIONALLY WAIVE ALL RIGHTS TO TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT
RELATES TO OR ARISES OUT OF ANY OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
THE ACTS OR OMISSIONS OF THE LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS OR
PROVISIONS OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHERWISE WITH
RESPECT THERETO. THE PROVISIONS OF THIS
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SECTION ARE A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AGREEMENT."
10. Counterparts. For the convenience of the parties, this Amendment
may be executed in multiple counterparts, each of which for all purposes shall
be deemed to be an original, and all such counterparts shall together constitute
but one and the same agreement.
11. Effect. Except as amended hereby, the Credit Agreement shall remain
unchanged and in full force and effect.
12. ENTIRE AGREEMENT. THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF. FURTHERMORE, IN
THIS REGARD, THIS AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.
IN WITNESS WHEREOF, this Amendment is deemed executed effective as of
the date first above written.
BORROWER:
TREK RESOURCES, INC.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telecopy: 214/373-6710 By: /s/ XXXXXXX X. XXXXXXXXXX
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Name: Xxxxxxx X. Xxxxxxxxxx
Title: President
LENDER:
COMPASS BANK
00 Xxxxxxxx Xxxxx, x0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: 713/968-8292 By: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
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