SECOND 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 Second Amendment ("SECOND 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 14th day of April, 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, and a First Amendment thereto executed on
March 26, 1998 (collectively, the "Credit Agreement").
Borrower has requested that Bank amend the Tangible Net Worth
Requirement, as set forth in Section 5.18 of 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 adding the
following defined terms:
"FIRST AMENDMENT" means that certain First Amendment to this
Agreement executed by Bank and Borrower on March 26, 1998.
"SECOND AMENDMENT" means that certain Second Amendment to this
Agreement executed by Bank and Borrower on April 14, 1998.
SECTION 5.18 of the Credit Agreement is amended in its entirety to
read as follows:
5.18 TANGIBLE NET WORTH REQUIREMENT. Borrower shall maintain a
total Tangible Net Worth of not less than $5,500,000.00, increasing
by: (x) fifty percent
(50%) of net income (excluding losses) of Borrower subsequent to
December 31, 1997, and (y) one hundred percent (100%) of any increases
in shareholders' equity resulting from the sale or issuance of stock
of any Borrower subsequent to December 31, 1997.
II. CERTAIN WAIVERS. Bank hereby waives Borrower's non-compliance with
the provisions of Section 5.18 of the Credit Agreement, TANGIBLE NET WORTH
REQUIREMENT, for the quarter ending December 31, 1997. This Second Amendment
shall not be deemed to be a waiver by Bank of any other covenant, condition or
obligation on the part of Borrower under the Credit Agreement, as hereby
amended, except as expressly set forth herein. In addition, this Second
Amendment shall in no respect evidence any commitment by the Bank to grant any
future waivers of any covenant, condition or obligation on the part of Borrower
under the Credit Agreement, as hereby amended. Any further waivers or consents
must be specifically agreed to in writing in accordance with Section 8.12 of the
Credit Agreement.
III. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES. To induce the Bank
to enter into this Second 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 Second Amendment and the
performance by the Borrower of its obligations under this Second 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 Second 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.
IV. DEFINED TERMS. Terms used herein that are defined in the Credit
Agreement shall have the same meanings herein, unless the context otherwise
requires.
V. REAFFIRMATION OF CREDIT AGREEMENT. This Second 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.
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VI. GOVERNING LAW. THIS SECOND 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 Second 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 Second 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.
VII. SEVERABILITY. Whenever possible each provision of this Second
Amendment shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Second 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
Second Amendment.
VIII. EXECUTION IN COUNTERPARTS. This Second 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.
IX. SECTION CAPTIONS. Section captions used in this Second Amendment are
for convenience of reference only, and shall not affect the construction of this
Second Amendment.
X. SUCCESSORS AND ASSIGNS. This Second 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.
XI. 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 Second Amendment or any of the other Loan Documents or to the transactions
contemplated hereby.
XII. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed as of the day and year first above written.
BORROWER:
MIDLAND RESOURCES, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxxxx
President
MIDLAND RESOURCES OPERATING COMPANY, INC.
By:
-------------------------------------
Xxxxxx X. Xxxxxxxx
President
SUMMIT PETROLEUM CORPORATION
By:
-------------------------------------
Xxxxxx X. Xxxxxxxx
President
BANK:
COMPASS BANK
By:
-------------------------------------
Xxxxxxxx X. Xxxxx
Vice President
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