Exhibit 10.7


FIRST
AMENDMENT TO CREDIT AND SECURITY AGREEMENT


THIS AMENDMENT (the “Amendment”),
dated as of March 2, 2007, is entered into by and among TRADESTAR CONSTRUCTION
SERVICES, INC., a New Mexico corporation (“Tradestar”), PETROLEUM ENGINEERS,
INC., a Louisiana corporation (“Petroleum Engineers”, and together with
Tradestar, the “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (as more
fully defined in Paragraph 1 of this Amendment, the “Lender”), acting through
its Wells Fargo Business Credit operating division.


Recitals


The Borrower and the
Lender are parties to a Credit and Security Agreement dated as of May 23, 2006
(as amended from time to time, the “Credit Agreement”).  Capitalized terms used in these recitals have
the meanings given to them in the Credit Agreement unless otherwise specified.


The Borrower has
requested that certain amendments be made to the Credit Agreement, which the
Lender is willing to make pursuant to the terms and conditions set forth
herein.


NOW, THEREFORE, in consideration
of the premises and of the mutual covenants and agreements herein contained, it
is agreed as follows:


1.             Defined Terms. 
Capitalized terms used in this Amendment which are defined in the Credit
Agreement shall have the same meanings as defined therein, unless otherwise
defined herein.  In addition, Section 1.1
of the Credit Agreement is amended by adding or amending, as the case may be,
the following definitions:


“Affiliate”
or “Affiliates” means Tradestar Services, Inc., Decca Consulting Ltd.,
and any other Person controlled by, controlling or under common control with
the Borrower, including any Subsidiary of the Borrower.  For purposes of this definition, “control,”
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.


“Decca
Consulting” means Decca Consulting Ltd., a corporation organized and
existing under the laws of Alberta, Canada.


“Eligible
Accounts” means all unpaid Accounts of the Borrower arising from the sale
or lease of goods or the performance of services, net of any credits, but
excluding any such Accounts having any of the following characteristics:


(i)            That portion of Accounts unpaid 90
days or more after the invoice date or, if the Lender in its discretion has
determined that a particular dated Account may be 



   
 









eligible, that portion of
such Account which is unpaid more than 60 days past the stated due date or more
than 90 days past the invoice date;


(ii)           That portion of Accounts related to
goods or services with respect to which the Borrower has received notice of a
claim or dispute, which are subject to a claim of offset or a contra account,
or which reflect a reasonable reserve for warranty claims or returns;


(iii)          That portion of Accounts not yet
earned by the final delivery of goods or rendition of services, as applicable,
by the Borrower to the customer, including progress billings, and that portion
of Accounts for which an invoice has not been sent to the applicable account
debtor;


(iv)          Accounts constituting (i) proceeds of
copyrightable material unless such copyrightable material shall have been
registered with the United States Copyright Office, or (ii) proceeds of
patentable inventions unless such patentable inventions have been registered
with the United States Patent and Trademark Office;


(v)           Accounts owed by any unit of
government, whether foreign or domestic (provided, however, that there shall be
included in Eligible Accounts that portion of Accounts owed by such units of
government for which the Borrower has provided evidence satisfactory to the
Lender that (A) the Lender has a first priority perfected security interest and
(B) such Accounts may be enforced by the Lender directly against such unit of
government under all applicable laws);


(vi)          Accounts owed by an account debtor
located outside the United States which are not (A) backed by a bank letter of
credit naming the Lender as beneficiary or assigned to the Lender, in the
Lender’s possession or control, and with respect to which a control agreement
concerning the letter-of-credit rights is in effect, and acceptable to the
Lender in all respects, in its sole discretion, or (B) covered by a foreign
receivables insurance policy acceptable to the Lender in its sole discretion;


(vii)         Accounts denominated in any currency
other than United States dollars;


(viii)        Accounts owed by an account debtor that
is insolvent, the subject of bankruptcy proceedings or has gone out of
business;


(ix)           Accounts owed by an Owner,
Subsidiary, Affiliate, Officer or employee of the Borrower;


(x)            Accounts not subject to a duly
perfected security interest in the Lender’s favor or which are subject to any
Lien in favor of any Person other than the Lender;


(xi)           That portion of Accounts that has
been restructured, extended, amended or modified;



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(xii)          That portion of Accounts that
constitutes advertising, finance charges, service charges or sales or excise
taxes;


(xiii)         Accounts owed by an account debtor
other than Aspect Resources, Remington Oil and Gas, Walter Oil and Gas, Kearney
Electric or Indicom Electric Company, regardless of whether otherwise eligible,
to the extent that the aggregate balance of Accounts owed by such account debtor
exceeds 15% of the aggregate amount of all Accounts;


(xiv)        Accounts owed by Aspect Resources,
Remington Oil and Gas, or Walter Oil and Gas, regardless of whether otherwise
eligible, to the extent that the aggregate balance of Accounts owed by such
account debtor exceeds 20% of the aggregate amount of all Accounts;


(xv)         Accounts owed by an account debtor to
Tradestar, regardless of whether otherwise eligible, if 10% or more of the
total amount of Accounts due from such debtor is ineligible under clauses (i),
(ii), or (xi) above;


(xvi)        Accounts owed by an account debtor to
Petroleum Engineers, regardless of whether otherwise eligible, if 20% or more
of the total amount of Accounts due from such debtor is ineligible under clause
(i) above or if 10% or more of the total amount of Accounts due from such
debtor is ineligible under clauses (ii), or (xi) above;


(xvii)       Accounts owed by Kearney Electric or
Indicom Electric Company, regardless of whether otherwise eligible, to the
extent that the aggregate balance of Accounts owed by such account debtor
exceeds 25% of the aggregate amount of all Accounts; and


(xviii)      Accounts, or portions thereof, otherwise
deemed ineligible by the Lender in its sole discretion.


“Floating Rate”
means, (i) with respect to Revolving Advances evidenced by the Revolving Note,
an annual interest rate equal to the sum of the Prime Rate plus one percent
(1.0%), which interest rate shall change when and as the Prime Rate changes and
(ii) with respect to the Structural Overadvance evidenced by the Structural
Overadvance Note, an annual interest rate equal to the sum of the Prime Rate
plus four percent (4.0%), which interest rate shall change when and as the
Prime Rate changes.


“Lender”
means Wells Fargo Bank, National Association in its broadest and most
comprehensive sense as a legal entity, and is not limited in its meaning to
Lender’s Wells Fargo Business Credit operating division, or to any other
operating division of Lender.


“Maturity Date”
means, with respect to the Credit Facility, May 23, 2010, as may be extended
pursuant to Section 2.9.



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“Maximum Line
Amount” means $7,000,000, unless this amount is reduced pursuant to Section
2.9, in which event it means such lower amount.


“Note”
means the Revolving Note, the Structural Overadvance Note, and the Revolving
Note and the Structural Overadvance Note.


“Petroleum Engineers Borrowing Base” means at any time the
lesser of:


(a)           The Maximum Line Amount; or


(b)           Subject to change from time to time
in the Lender’s sole discretion, the sum of:


(i)            the product of the Accounts Advance
Rate times Petroleum Engineers’s Eligible Accounts, less


(ii)           The Borrowing Base Reserve, less


(iii)          Indebtedness that Petroleum Engineers
owes to the Lender that has not yet been advanced on the Revolving Note, and
the dollar amount that the Lender in its reasonable discretion then determines
to be a reasonable determination of Petroleum Engineers’s credit exposure with
respect to any swap, derivative, foreign exchange, hedge, deposit, treasury
management or other similar transaction or arrangement in effect between the
Borrower and the Lender that is not described in Article II of this Agreement
and any indebtedness owed by Petroleum Engineers to Wells Fargo Merchant
Services, L.L.C.


“Purchase Price”
means the Purchase Price, as defined in the Stock Purchase Agreement.


“Stock Purchase
Agreement” means the Amended and Restated Stock Purchase Agreement dated as
of March 2, 2007 by and among Tradestar Services, Inc., 1297181 Alberta Ltd.,
383210 Alberta Ltd, Dave Hunter Resources Inc., Barry Ahearn and Dave Hunter.


“Structural
Overadvance” has the meaning specified in Section 2.14.


“Structural Overadvance Note” means the Borrower’s promissory
note, payable to the order of the Lender in substantially the form of Exhibit D
hereto, as same may be renewed and amended from time to time, and all
replacements thereto.


“Tradestar Borrowing Base” means at any time the lesser of:


(a)           The Maximum Line Amount; or



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(b)           Subject to change from time to time
in the Lender’s sole discretion, the sum of:


(i)            the product of the Accounts Advance
Rate times Tradestar’s Eligible Accounts, less


(ii)           The Borrowing Base Reserve, less


(iii)          Indebtedness that Tradestar owes to
the Lender that has not yet been advanced on the Revolving Note, and the dollar
amount that the Lender in its reasonable discretion then determines to be a
reasonable determination of the Tradestar’s credit exposure with respect to any
swap, derivative, foreign exchange, hedge, deposit, treasury management or
other similar transaction or arrangement in effect between Tradestar and the
Lender that is not described in Article II of this Agreement and any
indebtedness owed by Tradestar to Wells Fargo Merchant Services, L.L.C.


2.             The definition of “Wells Fargo Bank Affiliate
Obligations” is hereby deleted in its entirety from the Credit Agreement and
shall not be replaced, and each reference in the Credit Agreement to “Obligations”
is hereby deleted and replaced with the term “Indebtedness”, and Section 1.1 of
the Agreement shall further be amended to include the following definition:


“Indebtedness”
is used herein in its most comprehensive sense and means any and all advances,
debts, obligations and liabilities of the Borrower to the Lender, heretofore,
now or hereafter made, incurred or created, whether voluntary or involuntary
and however arising, whether due or not due, absolute or contingent, liquidated
or unliquidated, determined or undetermined, including under any swap,
derivative, foreign exchange, hedge, deposit, treasury management or other
similar transaction or arrangement at any time entered into by the Borrower
with the Lender or with Wells Fargo Merchant Services, L.L.C., and whether the
Borrower may be liable individually or jointly with others, or whether recovery
upon such Indebtedness may be or hereafter becomes unenforceable.


3.             Section 2.6(g) and 2.6(h) of the Credit Agreement are
hereby amended and restated to read in their entirety as follows:


“(g)  Termination
and Line Reduction Fees.  If
(i) the Lender terminates the Credit Facility during a Default Period, or if
(ii) the Borrower terminates or reduces the Credit Facility as provided under
Section 2.9 on a date prior to the Maturity Date, then the Borrower shall pay
the Lender as liquidated damages and not as a penalty a termination fee in an
amount equal to a percentage of (A) the Maximum Line Amount (or the reduction
of the Maximum Line Amount, as the case may be) and (B) the amount prepaid on
the Structural Overadvance Note, calculated as follows:  (A) three percent (3.0%) if the termination
or reduction occurs on or before March 2, 2008; (B) two percent (2.0%) if the
termination or reduction occurs after March 2, 2008, but on or before March 2,
2009; and (C) one percent (1.0%) if the termination or reduction occurs after
March 2, 



 5
 









2009; provided, however,
that a termination fee will not be payable on the Structural Overadvance Note
unless the Maximum Line Amount is terminated or reduced at the same time.


(h)  Waiver of
Termination Fees.  The
Borrower will be excused from the payment of termination fees otherwise due
under Section 2.6(g) if such termination is made (i) because of refinancing
through another division of the Lender after March 2, 2008, (ii) so long as no
Default Period is then in existence, within sixty (60) days of the Lender
establishing an aggregate Borrowing Base Reserve in excess of $100,000 or (iii)
so long as no Default Period is then in existence, within sixty (60) days of
the Lender designating the required amounts of new covenants, in accordance
with Section 6.2(j), at levels that are more restrictive than the covenants
that were previously established for the Borrower.”


4.             New Sections 2.14 and 2.15 of the Credit Agreement are
hereby added to read in their entirety as follow:


“Section 2.14         Structural Overadvance.  The Lender agrees, subject to the terms and
conditions of this Credit Agreement, to make a single advance to the Borrower
(the “Structural Overadvance”) in an amount not to exceed $1,500,000. The
Structural Overadvance will be made on the Closing Date (as defined the Stock
Purchase Agreement) for the acquisition of Decca Consulting by Tradestar
Services, Inc.  The Borrower’s obligation
to pay the Structural Overadvance shall be evidenced by the Structural
Overadvance Note and shall be secured by the Collateral as provided in Article
III.  Upon fulfillment of the applicable
conditions set forth in this Credit Agreement, the Lender shall deposit the
proceeds of the Structural Overadvance by crediting the same to the Borrower’s
demand deposit account specified in Section 2.2(b) unless the Lender and the
Borrower shall agree in writing to another manner of disbursement.


Section 2.15           Payment of Structural Overadvance
Note.  The outstanding principal
balance of the Structural Overadvance Note shall be due and payable as follows:


(a)           On the earlier of (i) the closing of
the Decca Consulting credit facilities with Wells Fargo Financial Corporation
Canada (which is expected to occur prior to March 15, 2007) and (ii) March 15,
2007, the Borrower shall pay principal on the Structural Overadvance Note in
the amount necessary such that the remaining principal balance on the
Structural Overadvance Note shall not exceed $638,000;


(b)           Beginning on April 1, 2007, and on
the first day of each month thereafter, in equal monthly principal installments
of approximately $26,583, plus interest, such that the remaining balance of the
Structural Overadvance Note is amortized over 24 months (such that the
Structural Overadvance Note is paid in full on March 1, 2009); and



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(c)           On the Termination Date, the entire
unpaid principal balance of the Structural Overadvance Note, and all unpaid
interest accrued thereon, shall in any event be due and payable.


All prepayments of
principal with respect to the Structural Overadvance Note shall be applied to
the most remote principal installment or installments then unpaid.”


5.             Section 3.1 of the Credit Agreement is hereby amended
and restated to read in its entirety as follows:


“Section 3.1           Grant of Security Interest.
The Borrower hereby pledges, assigns and grants to the Lender, for the benefit
of itself and as agent for Wells Fargo Merchant Services, L.L.C., a lien and
security interest (collectively referred to as the “Security Interest”) in the
Collateral, as security for the payment and performance of: (a) all present and
future Indebtedness of the Borrower to the Lender; (b) all obligations of the
Borrower and rights of the Lender under this Agreement; and (c) all present and
future obligations of the Borrower to the Lender of other kinds. Upon request
by the Lender, the Borrower will grant the Lender, for the benefit of itself
and as agent for Wells Fargo Merchant Services, L.L.C., a security interest in
all commercial tort claims that the Borrower may have against any Person.”


6.             Section 6.2 of the Credit Agreement, Financial
Covenants, is hereby amended and restated to read in its entirety as
follows:


“(a)  Minimum
Book Net Worth.  Tradestar
will maintain, during each period described below, its Book Net Worth
(calculated without regard to (i) any change in the valuation of goodwill made
in accordance with FASB Accounting Standard 142, and (ii) any non-cash effects
of accounting for stock based compensation in accordance with FASB
pronouncement SFAS 123(r)), determined as of the end of each month, in an
amount not less than the amount set forth for each such period (numbers
appearing between “( )” are negative):




	
  Period

  	
   

  	
  Minimum Book

  Net Worth

  
	
  February 28,
  2007

  	
   

  	
  ($421,000)

  
	
  March 31, 2007

  	
   

  	
  ($386,000)

  
	
  April 30, 2007

  	
   

  	
  ($366,000)

  
	
  May 31, 2007

  	
   

  	
  ($316,000)

  
	
  June 30, 2007

  	
   

  	
  ($162,000)

  
	
  July 31, 2007

  	
   

  	
  ($132,000)

  
	
  August 31, 2007

  	
   

  	
  ($100,000)

  
	
  September 30,
  2007

  	
   

  	
  $193,000

  
	
  October 31, 2007

  	
   

  	
  $243,000

  
	
  November 30,
  2007

  	
   

  	
  $293,000

  
	
  December 31,
  2007 and each month thereafter

  	
   

  	
  $446,000

  






 



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(b)  Minimum Net
Income.  Tradestar will
achieve, for each period described below, fiscal year-to-date before-tax net
income from continuing operations, including extraordinary losses but excluding
extraordinary gains, all as determined in accordance with GAAP (calculated
without regard to (i) any change in the valuation of goodwill made in
accordance with FASB Accounting Standard 142, and (ii) any non-cash effects of
accounting for stock based compensation in accordance with FASB pronouncement
SFAS 123(r)) of not less than the amount set forth for each such period:




	
  Period

  	
   

  	
  Minimum Net Income

  
	
  Three months
  ending March 31, 2007

  	
   

  	
  $85,000

  
	
  Six months
  ending June 30, 2007

  	
   

  	
  $309,000

  
	
  Nine months
  ending September 30, 2007

  	
   

  	
  $664,000

  
	
  Twelve months
  ending December 31, 2007

  	
   

  	
  $917,000

  






 


(c)  Minimum
Book Net Worth.  Petroleum
Engineers will maintain, during each period described below, its Book Net Worth
(calculated without regard to (i) any change in the valuation of goodwill made
in accordance with FASB Accounting Standard 142, and (ii) any non-cash effects
of accounting for stock based compensation in accordance with FASB
pronouncement SFAS 123(r)), determined as of the end of each month, in an
amount not less than the amount set forth for each such period:




	
  Period

  	
   

  	
  Minimum Book

  Net Worth

  
	
  February 28,
  2007

  	
   

  	
  $2,017,000

  
	
  March 31, 2007

  	
   

  	
  $2,231,000

  
	
  April 30, 2007

  	
   

  	
  $2,291,000

  
	
  May 31, 2007

  	
   

  	
  $2,351,000

  
	
  June 30, 2007

  	
   

  	
  $2,576,000

  
	
  July 31, 2007

  	
   

  	
  $2,637,000

  
	
  August 31, 2007

  	
   

  	
  $2,697,000

  
	
  September 30,
  2007

  	
   

  	
  $2,940,000

  
	
  October 31, 2007

  	
   

  	
  $3,002,000

  
	
  November 30,
  2007

  	
   

  	
  $3,062,000

  
	
  December 31,
  2007 and each month thereafter

  	
   

  	
  $3,314,000

  






 


(d)  Minimum Net
Income.  Petroleum Engineers
will achieve, for each period described below, fiscal year-to-date after-tax
net income from continuing operations, including extraordinary losses but
excluding extraordinary gains, all as determined in accordance with GAAP
(calculated without regard to (i) any change in the valuation of goodwill made
in accordance with FASB Accounting Standard 142, and (ii) any non-cash 



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effects of accounting for
stock based compensation in accordance with FASB pronouncement SFAS 123(r)) of
not less than the amount set forth for each such period:




	
  Period

  	
   

  	
  Minimum Net Income

  
	
  Three months
  ending March 31, 2007

  	
   

  	
  $334,000

  
	
  Six months
  ending June 30, 2007

  	
   

  	
  $680,000

  
	
  Nine months
  ending September 30, 2007

  	
   

  	
  $1,045,000

  
	
  Twelve months
  ending December 31, 2007

  	
   

  	
  $1,417,000

  






 


(e)  Capital
Expenditures.  Tradestar will
not incur or contract to incur Capital Expenditures of more than $25,000 in the
aggregate during the fiscal year ended December 31, 2007, and zero during any
fiscal year thereafter.


(f)  Capital
Expenditures.  Petroleum Engineers
will not incur or contract to incur Capital Expenditures of more than $150,000
in the aggregate during the fiscal year ended December 31, 2007, and zero
during any fiscal year thereafter.


(g)  Distributions
from Tradestar to Tradestar Services, Inc.  Tradestar will not pay any dividends or
distributions to Tradestar Services, Inc., or repay existing intercompany debt
to Tradestar Services, Inc., other than distributions or repayments to allow
Tradestar Services, Inc. to make scheduled principal and interest payments on
debt owed by Tradestar Services, Inc. to the creditors listed on Schedule 6.2,
which distributions or repayments shall not exceed $100,000 in any month during
Tradestar’s fiscal year ending December 31, 2007, and shall be zero during any fiscal
year thereafter.  Before Tradestar makes
any distribution or repayment to Tradestar Services, Inc. otherwise permitted
under this Section 6.2(g), and immediately after making any such payment, (i)
Tradestar Availability shall not be less than $375,000, (ii) Tradestar shall
have positive Book Net Worth and (iii) no Default Period is then in existence
and none would exist immediately after such distribution.  The debt owed by Tradestar Services, Inc. is
not, and will not, be guaranteed by Tradestar.


(h)  Distributions
from Petroleum Engineers to Tradestar Services, Inc.  Petroleum Engineers will not pay any
dividends or distributions to Tradestar Services, Inc. other than distributions
(i) to allow Tradestar Services, Inc. to make scheduled principal and interest
payments on debt owed by Tradestar Services, Inc. to the creditors listed on
Schedule 6.2, (ii) to allow Tradestar Services, Inc. to make loans or advances
on a subordinated basis to Tradestar, or (iii) to allow Tradestar Services,
Inc. to fund corporate overhead needs; which distributions shall not exceed
$150,000 in any month, or $1,800,000 in the aggregate during Petroleum
Engineers’s fiscal year ending December 31, 2007, and shall be zero during any
fiscal year thereafter.  Before Petroleum
Engineers makes any distribution to Tradestar Services, Inc. otherwise
permitted under this Section 6.2(h), and immediately after making any such
payment (i) Petroleum Engineers Availability shall not be less than $350,000,
(ii) Petroleum Engineers shall have positive Book Net Worth and (iii) no
Default Period is then in existence and none would exist 



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immediately after such
distribution.  The debt owed by Tradestar
Services, Inc. is not, and will not, be guaranteed by Petroleum Engineers.


(i)  Distributions
from Borrowers to Tradestar Services, Inc. for the purchase of Decca Consulting.  Borrower will not pay any dividends or
distributions to Tradestar Services, Inc. for the purchase of Decca Consulting
except as permitted under this Section 6.2(i), which dividends or distributions
shall not exceed $1,500,000 in the aggregate during Borrower’s fiscal year
ending December 31, 2007, and shall be zero during any fiscal year
thereafter.  Borrower may make
distributions to Tradestar Services, Inc. (i) from the Structural Overadvance
to allow 1297181 Alberta Ltd. and Tradestar Services, Inc. to pay the Purchase
Price for the purchase of Decca Consulting and (ii) to allow Decca Consulting
to repay loans or advances made by Wells Fargo Financial Corporation Canada.  Before either Borrower makes any distribution
to Tradestar Services, Inc. otherwise permitted under this Section 6.2(i), and
immediately after making any such payment (i) such Borrower shall have positive
Book Net Worth and (ii) no Default Period is then in existence and none would
exist immediately after such distribution.


(j)  New
Covenants.  The Borrower and
the Lender shall agree on new covenant levels for this Section 6.2 prior to
December 31, 2007, but if the Borrower and the Lender do not agree, the Lender
shall designate the required amounts in its sole discretion based on (i) the
Borrower’s reasonable projections for such periods and/or (ii) the Borrower’s
historical financial performance, and the failure by the Borrower to maintain
the designated amounts shall constitute an Event of Default.”


7.             Section 6.4 of the Credit Agreement is hereby amended
and restated to read in its entirety as follows:


“Section 6.4           Indebtedness.  The Borrower will not incur, create, assume
or permit to exist any indebtedness or liability on account of deposits or
advances or any indebtedness for borrowed money or letters of credit issued on
the Borrower’s behalf, or any other indebtedness or liability evidenced by
notes, bonds, debentures or similar obligations, except:


(a)           Any existing or future Indebtedness
or any other obligations of the Borrower to the Lender;


(b)           Any indebtedness of the Borrower in
existence on the date hereof and listed in Schedule 6.4 hereto; and


(c)           Any indebtedness relating to
Permitted Liens.”


8.             Section 7.1(q) of the Credit Agreement, Events of
Default, is hereby amended and restated to read in its entirety as follows:



 10















“(q)  Any breach, default or event of default by or
attributable to any Affiliate under any agreement between such Affiliate and
the Lender shall occur, or any breach, default or event of default by or
attributable to the Borrower or any Affiliate under any agreement between the
Borrower or such Affiliate and Wells Fargo Financial Corporation Canada shall
occur; or”


9.             Exhibit A. 
Exhibit A to the Credit Agreement is amended and restated in its
entirety and replaced with Exhibit A attached hereto.


10.           Schedule 6.2.  Schedule 6.2 to the Credit Agreement is
amended by adding the following promissory notes, secured by all of the issued
and outstanding capital stock of Decca Consulting, to the list of Tradestar
Services, Inc. Creditors:




	
  Creditor

  	
   

  	
  Amount

  
	
  383210 Alberta Ltd

  	
   

  	
  Cdn $725,000

  
	
  Dave Hunter Resources Inc.

  	
   

  	
  Cdn $725,000

  






 


11.           Schedule 6.3 and Schedule 6.5.  Schedule 6.3 and Schedule 6.5 to the Credit
Agreement is amended by adding as permitted liens and guaranties a guaranty by
each Borrower and a lien by each Borrower in favor of Wells Fargo Financial
Corporation Canada in connection with the Decca Consulting credit facilities
with Wells Fargo Financial Corporation Canada.


12.           No Other Changes.  Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter of credit
thereunder.


13.           Amendment Fee.  The Borrower shall pay the Lender as of the
date hereof a fully earned, non-refundable fee in the amount of $65,000 in
consideration of the Lender’s execution and delivery of this Amendment.


14.           Conditions Precedent.  This Amendment shall be effective when the
Lender shall have received an executed original hereof, together with each of
the following, each in substance and form acceptable to the Lender in its sole
discretion:


(a)           The Revolving Note
and the Structural Overadvance Note, duly executed by the Borrower.


(b)           The Acknowledgment
and Agreement of Guarantor and the Acknowledgment and Agreement of Subordinated
Creditor set forth at the end of this Amendment, duly executed by each
Guarantor and Subordinated Creditor.


(c)           Evidence that the
Closing (as defined the Stock Purchase Agreement), has occurred.



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(d)           Evidence of a
$300,000 cash infusion into Tradestar Services, Inc. for use by Tradestar
Services, Inc. as partial payment of the Purchase Price.


(e)           A true and correct
copy of the Stock Purchase Agreement.


(f)            A true and correct
copy of the documentation evidencing the Corporate legal structure of the
Borrower, the Guarantors and all Affiliates of any of them.


(g)           Evidence that all
notes payable to Clarence Downs by Tradestar Services, Inc., are properly
reflected on the financial statements of Tradestar Services, Inc., are not
reflected on the financial statements of Tradestar, and that there are no notes
payable to Clarence Downs by Tradestar.


(h)           Evidence that since
the date of the most recent financial statements furnished to the Lender, there
has been no change in the Borrower’s or any Guarantor’s business, properties or
condition (financial or otherwise) which has had a Material Adverse Effect.


(i)            Evidence from the
Borrower’s independent certified public accountants as to the Borrower’s
tax-loss carry forward amount and its expected impact on the Borrower’s
financial statements in future periods.


(j)            All outstanding
compliance certificates of Tradestar’s chief financial officer in the form of
Exhibit B-1 and of Petroleum Engineers’s chief financial officer in the form of
Exhibit B-2 as required by Section 6.1(b) of the Credit Agreement.


(k)           Payment of the fee
described in Paragraph 13.


(l)            Such other matters
as the Lender may require.


15.           Representations and Warranties.  The Borrower hereby represents and warrants
to the Lender as follows:


(a)           The Borrower has all
requisite power and authority to execute this Amendment and any other
agreements or instruments required hereunder and to perform all of its
obligations hereunder and thereunder, and this Amendment and all such other
agreements and instruments have been duly executed and delivered by the
Borrower and constitute the legal, valid and binding obligation of the
Borrower, enforceable in accordance with its terms.


(b)           The execution,
delivery and performance by the Borrower of this Amendment and any other
agreements or instruments required hereunder have been duly authorized by all
necessary corporate action and do not (i) require any authorization,
consent or approval by any governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, (ii) violate any provision
of any law, rule or regulation or of any order, writ, injunction or decree
presently in effect, having applicability to the Borrower, or the articles of
incorporation or by-laws of the Borrower, or (iii) result in a breach of
or constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or 



 12
 









instrument to
which the Borrower is a party or by which it or its properties may be bound or
affected.


(c)           All of the
representations and warranties contained in Article V of the Credit Agreement
are correct on and as of the date hereof as though made on and as of such date,
except to the extent that such representations and warranties relate solely to
an earlier date.


16.           References.  All references in the Credit Agreement to “this
Agreement” shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.


17.           No Waiver.  The
execution of this Amendment and the acceptance of all other agreements
and instruments related hereto shall not be deemed to be a waiver of any Default or Event of Default  under the Credit Agreement or a waiver of any breach,
default or event of default under any Security Document or other document held
by the Lender, whether or not known to the Lender and whether or not existing
on the date of this Amendment.


18.           Release.  The Borrower, and each Guarantor by signing
the Acknowledgment and Agreement of Guarantor set forth below, and each
Subordinated Creditor by signing the Acknowledgment and Agreement of
Subordinated Creditors set forth below, each hereby absolutely and unconditionally
releases and forever discharges the Lender, and any and all participants,
parent entities, subsidiary entities, affiliated entities, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and employees of any of the foregoing,
from any and all claims, demands or causes of action of any kind, nature or
description, whether arising in law or equity or upon contract or tort or under
any state or federal law or otherwise, which the Borrower or each Guarantor or
each Subordinated Creditor has had, now has or has made claim to have against
any such Person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.


19.           Costs and Expenses.  The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Loan
Documents, including without limitation all reasonable fees and disbursements
of legal counsel.  Without limiting the
generality of the foregoing, the Borrower specifically agrees to pay all fees
and disbursements of counsel to the Lender for the services performed by such
counsel in connection with the preparation of this Amendment and the documents
and instruments incidental hereto.  The
Borrower hereby agrees that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrower, make a
loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses and the fee required under Paragraph 13 of this Amendment.



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20.           Miscellaneous.  This Amendment and the Acknowledgment and
Agreement of Guarantor and the Acknowledgment and Agreement of Subordinated
Creditor may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.


[The remainder of this page intentionally left blank.]



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IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed as of the date
first above written.


	
  WELLS FARGO BANK, NATIONAL ASSOCIATION

  	
   

  	
  TRADESTAR CONSTRUCTION SERVICES, INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Martin E. Tracy

  	
   

  	
  By:

  	
  /s/ Kenneth Thomas 

  
	
  Name:

  	
  Martin E. Tracy

  	
   

  	
  Name:

  	
  Kenneth Thomas 

  
	
  Its:

  	
  Vice President

  	
   

  	
  Its:

  	
  Vice President and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PETROLEUM ENGINEERS, INC. 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ D. Hughes Watler, Jr. 

  	
   

  	
   

  
	
  Name:

  	
  D. Hughes Watler, Jr. 

  	
   

  	
   

  
	
  Its:

  	
  Chief Financial Officer

  	
   

  	
   

  



 



 15
 









ACKNOWLEDGMENT
AND AGREEMENT OF GUARANTOR


The undersigned, a
guarantor of the indebtedness of Tradestar Construction Services, Inc., a New
Mexico corporation and Petroleum Engineers, Inc., a Louisiana corporation
(together, the “Borrower”), to Wells Fargo Bank, National Association (as more
fully defined in Paragraph 1 of this Amendment, the “Lender”), acting through
its Wells Fargo Business Credit operating division pursuant to a Guaranty dated
May 23, 2006 the “Guaranty”), hereby (i) acknowledges receipt of the foregoing
Amendment; (ii) consents to the terms (including without limitation the
release set forth in Paragraph 18 of the Amendment) and execution thereof;
(iii) reaffirms all obligations to the Lender pursuant to the terms of the
Guaranty; and (iv) acknowledges that the Lender may amend, restate,
extend, renew or otherwise modify the Credit Agreement and any indebtedness or
agreement of the Borrower, or enter into any agreement or extend additional or
other credit accommodations, without notifying or obtaining the consent of the
undersigned and without impairing the liability of the undersigned under the  Guaranty
for all of the Borrower’s present and future indebtedness to the Lender.


In addition, in
consideration of the Lender allowing the distribution from Borrowers to
Tradestar Services, Inc. in Section 6.2(i) for the purchase of Decca
Consulting, the undersigned guarantor hereby covenants and agrees that it will
take all necessary action to further secure its Guaranty by granting a pledge
and security interest in not less than 65% of all of the issued and outstanding
capital stock of Decca Consulting to the Lender upon payment in full of the
Notes set forth in Paragraph 10 of the Amendment.


	
  

  	
   

  	
  TRADESTAR SERVICES, INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Richard A. Piske, III 

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Richard A. Piske, III

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President

  



 



 16
 









ACKNOWLEDGMENT
AND AGREEMENT OF SUBORDINATED CREDITOR


The undersigned, a
subordinated creditor of Tradestar Construction Services, Inc., a New Mexico
corporation and Petroleum Engineers, Inc., a Louisiana corporation (together,
the “Borrower”) to Wells Fargo Bank, National Association (as more fully
defined in Paragraph 1 of this Amendment, the “Lender”) acting through its
Wells Fargo Business Credit operating division, pursuant to a Subordination
Agreement dated May 23, 2006 (the “Subordination Agreement”), hereby (i)
acknowledges receipt of the foregoing Amendment; (ii) consents to the
terms (including without limitation the release set forth in Paragraph 18 of
the Amendment) and execution thereof; (iii) reaffirms all obligations to
the Lender pursuant to the terms of the Subordination Agreement; and
(iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Loan Documents and any indebtedness or agreement of the
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the obligations of the undersigned under the  Subordination
Agreement.


	
  

  	
   

  	
  TRADESTAR SERVICES, INC. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Richard A. Piske, III 

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Richard A. Piske, III

  
	
   

  	
   

  	
   

  	
  Its:

  	
  President

  



 



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