FIRST AMENDMENT TO
SECURED REDUCING REVOLVING CREDIT AGREEMENT
DATED DECEMBER 17, 1997
BY AND AMONG
MIDLAND RESOURCES, INC.,
MIDLAND RESOURCES OPERATING COMPANY, INC.,
SUMMIT PETROLEUM CORPORATION
AND
COMPASS BANK
This First Amendment ("FIRST AMENDMENT") by and between MIDLAND
RESOURCES, INC. ("MRI"), a Texas corporation, MIDLAND RESOURCES OPERATING
COMPANY, INC., a Texas corporation, and SUMMIT PETROLEUM CORPORATION, a
Colorado corporation (individually and collectively, "BORROWER") and COMPASS
BANK, a Texas state chartered bank ("BANK") is executed on this 26th day of
March, 1998, to be effective, however, as of December 31, 1997.
W I T N E S S E T H:
Borrower and Bank entered into a Secured Reducing Revolving Credit
Agreement dated December 17, 1997 (the "Credit Agreement").
Borrower has requested that Bank amend the definition of Tangible
Net Worth, as set forth in the Credit Agreement, and Bank is willing to enter
into the requested amendment, subject to and conditioned upon the provisions
set forth herein.
NOW, THEREFORE, in consideration of the promises herein contained,
and each intending to be legally bound hereby, the parties agree as follows:
I. AMENDMENTS TO CREDIT AGREEMENT.
ARTICLE I of the Credit Agreement is hereby amended by replacing
the following defined terms:
"TANGIBLE NET WORTH" means the total assets of Borrower exclusive of
(a) those assets classified as intangible, including, without limitation,
goodwill, patents, trademarks, trade names, copyrights, franchises and
deferred charges, (b) treasury stock and minority interests in any Person,
(c) cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of capital
stock, (d) to the extent not already deducted from total assets, allowances
for depreciation, depletion, obsolescence and/or amortization of
properties, uncollectible accounts, and contingent but probable liabilities
as to which an amount can be established, and (e) all assets arising from
advances to officers, former officers or sales representatives of Borrower
made outside of the ordinary course of business; less total liabilities of
Borrower; all of the above being determined in accordance with GAAP;
PROVIDED, HOWEVER, that notwithstanding any of the foregoing categories of
assets that are excluded from the calculation of Tangible Net Worth, the
following items are hereby expressly INCLUDED in Tangible Net Worth: (x)
deferred taxes, and (y) those certain contracts and leases owned by
Borrower and reflected on its consolidated balance sheet as the contracts
and leases acquired in connection with MRI's acquisition in 1993 of Midland
Resources Operating Company, Inc.
II. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce the
Bank to enter into this First Amendment, Borrower hereby reaffirms, as of the
date hereof, its representations and warranties contained in Article IV of
the Credit Agreement and in all other documents executed pursuant thereto,
and additionally represents and warrants as follows:
A. The execution and delivery of this First Amendment and the performance
by the Borrower of its obligations under this First Amendment are within
Borrower's power, have been duly authorized by all necessary corporate
action, have received all necessary governmental approval (if any shall be
required), and do not and will not contravene or conflict with any
provision of law or of the charter or by-laws of the Borrower or of any
agreement binding upon Borrower.
B. This First Amendment represents the legal, valid and binding
obligations of Borrower enforceable against Borrower in accordance with its
terms subject as to enforcement only to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally.
C. Since the date of the Credit Agreement, no change, event or state of
affairs has occurred and is continuing which would constitute an Event of
Default or an Unmatured Event of Default.
III. DEFINED TERMS. Terms used herein that are defined in the Credit
Agreement shall have the same meanings herein, unless the context otherwise
requires.
IV. REAFFIRMATION OF CREDIT AGREEMENT. This First Amendment shall be
deemed to be an amendment to the Credit Agreement, and the Credit Agreement,
as amended hereby, is hereby ratified, adopted and confirmed in each and
every respect.
V. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. This First Amendment has
been entered into in Xxxxxx County, Texas, and it shall be performable for
all purposes in Xxxxxx County, Texas. Courts within the State of Texas shall
have jurisdiction over any and all disputes between the Borrower and the
Bank, whether in law or equity, including, but not limited to, any and all
disputes arising out of or relating to this First Amendment or any other Loan
Documents; and venue in any such dispute whether in federal or state court
shall be laid in Xxxxxx County, Texas.
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VI. SEVERABILITY. Whenever possible each provision of this First
Amendment shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this First Amendment shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this First Amendment.
VII. EXECUTION IN COUNTERPARTS. This First Amendment may be executed
in any number of counterparts and by the different parties on separate
counterparts on different dates, and each such counterpart shall be deemed to
be an original, but all such counterparts shall together constitute but one
and the same agreement.
VIII. SECTION CAPTIONS. Section captions used in this First Amendment
are for convenience of reference only, and shall not affect the construction
of this First Amendment.
IX. SUCCESSORS AND ASSIGNS. This First Amendment shall be binding
upon the Borrower, the Bank and its respective successors and assigns, and
shall inure to the benefit of the Borrower, the Bank and the respective
successors and assigns of the Bank.
X. NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The
provisions of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil
Statutes, Article 5069-15) are specifically declared by the parties hereto
not to be applicable to this First Amendment or any of the other Loan
Documents or to the transactions contemplated hereby.
XI. NOTICE OF FINAL AGREEMENT. THE WRITTEN CREDIT AGREEMENT, AS
HEREBY AMENDED, REPRESENTS THE FINAL AGREEMENT AMONG THE BANK, BORROWER AND
ANY GUARANTOR OR OTHER OBLIGOR, IF ANY, AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed as of the day and year first above written.
BORROWER:
MIDLAND RESOURCES, INC.
By: /s/ X. X. Xxxxxx, III
---------------------------------------
X. X. Xxxxxx, III
President
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MIDLAND RESOURCES OPERATING COMPANY, INC.
By: /s/ X. X. Xxxxxx, III
---------------------------------------
X. X. Xxxxxx, III
President
SUMMIT PETROLEUM CORPORATION
By: /s/ X. X. Xxxxxx, III
---------------------------------------
X. X. Xxxxxx, III
President
BANK:
COMPASS BANK
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
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