**Exhibit 4(b)(6)**

 

THIRD AMENDMENT TO 

FIRST AMENDED AND RESTATED CREDIT AGREEMENT

 

Reference is made to First Amended and Restated Credit Agreement datedas of March 31, 2003, as amended by the First Amendment to the First Amendedand Restated Credit Agreement dated as of March 31, 2003 and Second Amendmentto the First Amended and Restated Credit Agreement dated as of November 15,2003 (sometimes collectively referred to as the “Agreement”), between GATEWAYPIPELINE COMPANY, a Texas corporation and GATEWAY PROCESSING COMPANY, a Texascorporation (collectively “Borrowers”), GATEWAY ENERGY CORPORATION, a Delawarecorporation (“Guarantor”) and SOUTHWEST BANK OF TEXAS, N. A., a nationalbanking association (the “Lender”), pursuant to which the Borrowers amended andrestated, upon the terms and conditions therein stated, a One Million FiveHundred Thousand Dollars ($1,500,000.00) credit facility (“Loan”) with aMaturity Date of December 31, 2005, ** **subjectto****theconditions and covenants in the Agreement and Loan Documents.

 

RECITALS:

 

A.            The Borrowers haverequested the Lender extend the interest only period, and restate and rearrangethe amortization period, of the Loan.

 

B.            The Lender hasapproved Borrowers’ requests, subject to the conditions and covenants specifiedin this Third Amendment to First Amended and Restated Credit Agreement (the“Third Amendment”) and in the Loan Documents to be delivered contemporaneouslywith or pursuant to this Third Amendment.

 

THEREFORE, theBorrowers and the Lender hereby agree as follows, intending to be legallybound:

 

Section 1.               Definitions.  All capitalized terms shall have the meaningassigned to them in the Agreement, except as added, restated or otherwisedefined herein below:

 

(a)           Agreement.  The definition of Agreement is herebyrestated as follows:

 

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“Agreementmeans the First Amended and Restated Credit Agreement, as amended by (a) theFirst Amendment to the First Amended and Restated Credit Agreement delivered asof July 31, 2003, but dated as of March 31, 2003, (a) the Second Amendment tothe First Amended and Restated Credit Agreement delivered as of November 15,2003 and (b) this****Third Amendment, including the Schedules and Exhibitsthereto, respectively, as the same may be amended or supplemented from time totime.

 

(b)    Third Amendment.  The following definition of Third Amendmentis hereby added to the Agreement:

 

“ThirdAmendment means the Third Amendment to First Amended and Restated CreditAgreement dated as of March 31, 2004 by Borrowers and Guarantor to Lender.”

 

(c)           Loan Documents.  The definition of Loan Documents is herebyrestated as follows:

 

“LoanDocuments means (a) the Agreement, as amended by the Third Amendment andany certificates delivered in connection therewith, respectively, (b) any andall promissory notes (including, without limitation, the Note issued pursuantto the Third Amendment), the Security Documents and any and other agreements infavor of Lender now or hereafter delivered pursuant to the Agreement or theThird Amendment and (c) all future renewals, extensions, rearrangements orrestatements of, or amendments or supplements to, any of the foregoing.

 

(d)           MadisonvilleMortgage. The definition of Madisonville Mortgage is hereby restated asfollows:

 

“Madisonville Mortgage means the First Amended and Restated Deedof Trust, Mortgage, Assignment of Production, Security Agreement and FinancingStatement dated as of March 31, 2003, recorded in Volume 655, page 1 of theReal Property Records of Madison County, Texas, as amended by First Amendmentto First Amended and Restated Deed of Trust, Mortgage, Assignment ofProduction, Security Agreement and Financing Statement dated as of March 31,2003, and recorded in Volume 655, page 321 of the Official Public Records ofMadison County, Texas, executed by Borrowers, as Mortgagor and Debtor, to A.Stephen Kennedy, as Trustee for the benefit of Lender, as Beneficiary,Mortgagee and Secured Party, and any amendment, extension, modification,renewal or supplement thereof, which (a) covers the Madisonville GatheringSystem and (b) partially amends, extends and restates (but does not discharge,novate or release)  the Deed of Trust,Mortgage, Assignment of Production, Security Agreement and Financing Statementdated as of August 31, 2002, and recorded in Volume 632, page 186 of theOfficial Public Records of Madison County, Texas, which was previously amendedby (i) Second Loan Modification Agreement dated as of February 28, 2003,recording deferred, each of which was delivered by

 

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Borrowers, as mortgagor and debtor, to A. Stephen Kennedy, as Trusteefor the benefit of Lender, as holder and secured party, covering theMadisonville Gathering System.”

 

(e)           Note.  The definition of Note is hereby restated asfollows:

 

“Note means (a) the promissory note dated as of March 31, 2004,in the original principal amount of One Million Five Hundred Thousand andNo/100ths Dollars ($1,500,000.00), executed and delivered by Borrowers pursuantto the Third Amendment, which amends, rearranges, restates, renews and extends(but does not novate)  (i) PromissoryNote dated as of March 31, 2003 made by Borrowers and payable to the order of Lenderin the original principal amount of One Million Five Hundred Thousand andNo/100 Dollars ($1,500,000.00), (ii) Promissory Note dated March 31, 2003 madeby Borrowers and payable to the order of Lender in the original principalamount of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00),(iii) Promissory Note dated August 31, 2002 made by Borrowers and payable tothe order of Lender in the original principal amount of One Million FiveHundred Thousand and No/100 Dollars ($1,500,000.00) and (iv) Promissory Notedated February 21, 2002 made by Borrowers and payable to the order of Lender inthe original principal amount of One Million Five Hundred Thousand andNo/100ths Dollars ($1,500,000.00) and (b) any amendment, rearrangement,restatement, renewal and extension of the Note.

 

Each of the foregoing definitions as used in the Loan Documents shallinclude the definition or exhibit as amended or restated hereby.

 

Section 2.  Amendments.  The Agreement is hereby amended and restatedas follows:

 

(a)           Section 2.2of the Agreement is hereby amended and restated as follows:

 

“2.2. Payments.  TheBorrowers shall repay the principal and accrued but unpaid interest of the Loanadvanced under the Agreement in seventeen (17) monthly installments, the firstsixteen (16) installments shall be in the amount of Seventy Thousand andno/100ths Dollars ($70,000.00) each, and the last installment shall be in theamount of the then remaining unpaid principal balance of the Loan and allaccrued but unpaid interest thereon. The first monthly installment of principal and accrued but unpaidinterest shall be due and payable on August 31, 2004 and a like installmentshall be due and payable on each Payment Date thereafter until the MaturityDate, when the then remaining unpaid principal balance, and accrued but unpaidinterest thereon, shall be due and payable in full. Each payment on theObligations must be paid at Lender’s office, 5 Post Oak Park Place OfficeBuilding, 4400 Post Oak Parkway, Houston, Texas 77027, in funds which are orwill be available for immediate use by Lender by 2:00 p.m. (Houston time) onthe day due.  If any action is requiredor any payment is to be made on a day which is not a Business Day, then thataction or payment may be delayed until the next succeeding Business Day.  Any extension of time shall be included inthe computation of payments of interest and fees. All

 

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payments by the Borrowers of principal of and interest on the Loan, andof all fees and other amounts payable under any Loan Document, shall be payablewithout deduction for or on account of any present or future Taxes or othercharges (excluding any franchise taxes or income taxes imposed on or measuredby the overall net income, assets net worth or shareholders’ capital of Lender)levied or imposed by the United States of America (or by any politicalsubdivision or taxing authority thereof or therein) through withholding ordeduction with respect to any such payments. If any Taxes or other charges are so levied or imposed, the Borrowerswill make additional payments in such amounts so that every net payment ofprincipal of and interest on the Obligations, and of all other amounts payableby it under any Loan Document, after withholding or deduction for or on accountof any such present or future Taxes or other charges, will not be less than theamount provided for herein or therein.”

 

(b)           Sections 2.3of the Agreement is hereby amended and restated as follows:

 

“2.3 Interest Rate and Payments.  The principal of the Loan advanced under the Agreement shall bearinterest prior to the earlier of the Maturity Date, or Default, at a fixed rateof seven and one-quarter per cent (7.25%) per annum. The Borrowers shall payaccrued but unpaid interest on the principal advanced hereunder as follows: (a)the Borrowers shall pay interest only as it accrues on the Note beginning onMarch 31, 2004 and continuing on each Payment Date thereafter through July 31,2004; and (b) the Borrowers shall pay installments of principal and interest asit accrues in accordance with Section 2.2 beginning on August****31,2004 and continuing until the Maturity Date.”

 

(c)           Section2.6 of the Agreement is hereby amended and restated as follows:

 

“2.6         VoluntaryPrepayments.  Borrowers may, uponone Business Day’s notice, prepay the outstanding principal of the Loan priorto the Maturity Date, in whole or in part; provided, however ifthe entire principal balance of the Loan is repaid on or before (a) August 31,2004, the Borrowers shall pay a prepayment fee equal to Sixteen Thousand andno/100ths Dollars ($16,000.00) or (b) the Maturity Date, the Borrowers shallpay a prepayment fee equal to the product of (i) One Thousand and no/100thsDollars ($1,000.00) times (ii) the number of Payment Dates remaining until theMaturity Date as of the date that the Borrowers prepay the Loan. Borrowersshall pay the fee within ten (10) Business Days following the date that aprepayment fee becomes due. The Borrowers and Guarantor stipulate that anyprepayment fee which may accrue pursuant to Section 2.6 is compensationto Lender for services performed separate and apart from the lending of moneyor the provision of credit pursuant to the Loan Documents. A notice ofprepayment shall constitute a binding obligation of Borrowers to make aprepayment on the date stated therein. Prepayments of principal of the Loan shall be applied to principalinstallments in inverse order of maturity, and may not be re-borrowed.”

 

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Section 3. Conditions Precedent.  Borrowers acknowledge that the Lender’s obligations under thisThird Amendment are conditioned upon Borrowers’ and Guarantor’s compliance withthe conditions precedent set forth in Section 4 of the Agreementincluding, without limitation, delivery of Security Documents, materialcontracts, lien searches, evidence of title to Collateral and environmentalinformation.

 

Section 4.               Representations.  The Borrowers represent and warrant that allof the representations and warranties contained in the Agreement and allinstruments and documents executed pursuant thereto or contemplated thereby aretrue and correct in all material respects on and as of this date, except (a)such representations that relate solely to an earlier date and that were trueand correct on such earlier date, and (b) the breach or inaccuracy ofrepresentations and warranties about which the Lender has been notified inwriting prior to the date of this Third Amendment.

 

Section 5.               ContinuedForce and Effect.  Except as specificallyamended herein, all of the terms and conditions of the Agreement and alldocuments executed in connection therewith or contemplated thereby are andremain in full force and effect in accordance with their respective terms.  All of the terms used herein have the samemeanings as set out in the Agreement, unless amended hereby or unless thecontext clearly requires otherwise. References in the Agreement to the “Agreement,” the “Credit Agreement”,“hereof”, “herein” and words of similar import shall be deemed to be referencesto the Agreement as amended hereby.  Anyreference in the Note or any of the Security Documents to the “Agreement” orthe “Credit Agreement” shall be deemed to be references to the Agreement asamended through the date hereof.

 

Section 6.               Severability.  In the event any one or more provisionscontained in the Agreement or this Third Amendment should be held to beinvalid, illegal or unenforceable in any respect, the validity, enforceabilityand legality of the remaining provisions contained herein and therein shall notbe affected in any way or impaired thereby and shall be enforceable inaccordance with their respective terms.

 

Section 7.               Expenses.  The Borrowers agree to pay (a) a work fee ofTwo Thousand Five Hundred and no/100ths Dollars ($2,500.00 ) to Lender and (b)all out-of-pocket costs and expenses (including reasonable fees and expenses oflegal counsel) of the Lender in connection with the preparation and enforcementof this Third Amendment.

 

Section 8.               Acknowledgment.  The Borrowers ratify and confirm that theAgreement, and the other Loan Documents executed in connection therewith, orpursuant thereto, are and remain in full force and effect in accordance withtheir respective terms and that the Collateral is unimpaired by this ThirdAmendment.  The officers of each of theBorrowers executing this Third Amendment, or any Loan Documents executed inconnection with or contemplated by this Third Amendment, represent and warrantthat they have full power and authority to execute and deliver this ThirdAmendment and the Loan Documents on behalf of each of the Borrowers, that suchexecution and delivery has been duly authorized by the Board of Directors ofeach of the Borrowers pursuant to resolutions delivered to Lender contemporaneouslyherewith and that the resolutions previously delivered to the Lender on March31, 2003, in connection with the execution and delivery of the Agreement, areand remain in full force and effect and have not been altered, amended orrepealed in anywise.

 

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Section 9.               GoverningLaw.  This Third Amendment shall begoverned by and construed in accordance with the laws of the State of Texasand, to the extent applicable, by federal law.

 

Section 10.             Affirmationof Security Interest.  The Borrowershereby confirm and agree that (a) any and all Liens granted to or for thebenefit of, or Collateral now or hereafter held by, the Lender as security forpayment and performance of the Note is hereby renewed and carried forth tosecure payment and performance of all of the Obligations; and (b) the SecurityDocuments are and remain legal, valid and binding obligations of the partiesthereto, enforceable in accordance with their respective terms.

 

**Section11.**             ARBITRATION. THE BORROWERS,GUARANTOR AND LENDER AGREE THAT ALL DISPUTES, CLAIMS AND CONTROVERSIES BETWEENTHEM, OR ANY OF THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, WHETHER INDIVIDUAL,JOINT OR CLASS IN NATURE, ARISING FROM THIS THIRD AMENDMENT OR ANY OF THE OTHERLOAN DOCUMENTS (INCLUDING CONTRACT AND TORT DISPUTES) SHALL BE ARBITRATEDPURSUANT TO THE RULES OF THE AMERICAN ARBITRATION ASSOCIATION UPON THE REQUESTOF ANY PARTY. NO ACT TO TAKE OR DISPOSE OF ANY COLLATERAL SECURING THEOBLIGATIONS SHALL CONSTITUTE A WAIVER OF THIS ARBITRATION PROVISION OR BEPROHIBITED BY THIS ARBITRATION PROVISION. THE FOREGOING INCLUDES OBTAININGINJUNCTIVE RELIEF OR A TEMPORARY RESTRAINING ORDER; INVOKING A POWER OF SALEUNDER ANY OF THE SECURITY DOCUMENTS; OBTAINING A WRIT OF ATTACHMENT OR THEIMPOSITION OF A RECEIVER; OR EXERCISING ANY RIGHTS RELATING TO PERSONALPROPERTY, INCLUDING TAKING OR DISPOSING OF SUCH PROPERTY WITH OR WITHOUTJUDICIAL PROCESS PURSUANT TO ARTICLE 9 OF THE UCC. ANY DISPUTES, CLAIMS ANDCONTROVERSIES CONCERNING THE LAWFULNESS OR REASONABLENESS OF ANY ACT OREXERCISE OF ANY RIGHTS OR ANY RIGHT RELATING TO THE COLLATERAL SECURING THEOBLIGATIONS (INCLUDING, WITHOUT LIMITATION, ANY CLAIM TO RESCIND, REFORM OROTHERWISE MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL SECURING THEOBLIGATIONS) SHALL ALSO BE ARBITRATED; PROVIDED THAT NO ARBITRATOR SHALL HAVETHE RIGHT OR POWER TO ENJOIN OR RESTRAIN ANY ACT OF ANY PARTY.  JUDGMENT UPON ANY AWARD RENDERED BY ANYARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION; PROVIDED THATNOTHING CONTAINED HEREIN SHALL BE DEEMED TO BE A WAIVER BY LENDER OF THEPROTECTIONS AFFORDED TO THE LENDER UNDER 12 USC § 91, TEX. FIN. CODE § 59.007,OR THE LAWS OF ANY OTHER STATE (TO THE EXTENT APPLICABLE TO THE LENDER) OR ANYOTHER PROTECTION PROVIDED TO THE LENDER BY THE LAWS OF THE STATE OF TEXAS ORTHE UNITED STATES. THE STATUTE OF LIMITATIONS, OR ESTOPPEL, LACHES, WAIVER ORSIMILAR DOCTRINES THAT WOULD OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY APARTY SHALL BE APPLICABLE IN ANY ARBITRATION PROCEEDING AND THE COMMENCEMENT OFANY ARBITRATION PROCEEDING SHALL BE DEEMED THE COMMENCEMENT OF AN ACTION FORTHESE PURPOSES. THE FEDERAL ARBITRATION ACT SHALL APPLY TO THE CONSTRUCTION,INTERPRETATION AND ENFORCEMENT OF THIS ARBITRATION PROVISION. IF THE FEDERALARBITRATION ACT IS

 

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**INAPPLICABLETO ANY SUCH DISPUTE, CLAIM OR CONTROVERSY FOR ANY REASON, THE ARBITRATION SHALLBE CONDUCTED PURSUANT TO THE TEXAS GENERAL ARBITRATION ACT, THIS ARBITRATIONPROVISION AND THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATIONASSOCIATION.**

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Section 12.             **JURISDICTION AND VENUE.SUBJECT TO THE PROVISIONS OF SECTION 11, ALL ACTIONS OR PROCEEDINGS WITHRESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF RELATEDTO OR FROM THIS THIRD AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BELITIGATED, AT THE SOLE DISCRETION AND ELECTION OF THE LENDER, IN THE COURTSHAVING SITUS IN HOUSTON, HARRIS COUNTY, TEXAS. IN THAT REGARD, THE BORROWERSAND GUARANTOR HEREBY SUBMIT TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERALCOURT LOCATED IN HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS ITMAY HAVE TO TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATIONBROUGHT AGAINST IT BY THE LENDER IN ACCORDANCEWITH THIS SECTION.**

 

Section 13.             Noticeand Acknowledgment of No Oral Agreements. To the extent allowed by law, the parties hereto agree to be bound bythe terms of the following notice:

 

**NOTICE:  THIS AGREEMENT AND ALL OTHER DOCUMENTSRELATING TO THIS LOAN CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THEFINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OFPRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.**

 

**THERE ARE NO UNWRITTENORAL AGREEMENTS OF THE PARTIES RELATING TO THIS LOAN.**

 

EXECUTEDeffective as of March 31, 2004.

 
| Address:                       | BORROWERS:                |
|--------------------------------|---------------------------|
|                           |                      |
| One Allen  Center              | GATEWAY  PIPELINE COMPANY |
| 500 Dallas  Street, Suite 2615 |                      |
| Houston,  Texas 77002          | By:                       |   |   |
| Phone:  (713) 336-0844    |                      | Michael T. Fadden, President |
| Fax:  (713) 336-0855      |                      |   |

 

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| Address:                         | GATEWAY  PIPELINE COMPANY      |
|----------------------------------|--------------------------------|
|                             |                           |   |
| One Allen  Center                | By:                            |   |   |
| 500 Dallas  Street, Suite 2615   |                           | Michael T. Fadden, President |
| Houston,  Texas 77002            |                           |   |
| Phone:  (713) 336-0844      |                           |   |
| Fax:  (713) 336-0855        |                           |   |
|                             |                           |   |
| Address:                         | SOUTHWEST  BANK OF TEXAS, N.A. |
|                             |                           |   |
| 5 Post Oak  Park Office Building |                           |   |
| 4400 Post  Oak Parkway           | By:                            |   |   |
| Houston,  Texas 77027            | Name:                          | Kenneth R.  Batson, III |
| Mail:                            | Title:                         | Assistant  Vice President - Energy |
| P. O. Box  27459                 | Lending                        |
| Houston,  Texas 77227-7459       |                           |
| Phone:  (713) 232-1247      |                           |
| Fax:  (713) 561-0345        |                           |

 

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