Exhibit 10.7


 


SECOND
AMENDMENT TO DEED OF TRUST, LINE OF CREDIT MORTGAGE,


ASSIGNMENT,
SECURITY AGREEMENT, FIXTURE FILING


AND
FINANCING STATEMENT


 


A CARBON, PHOTOGRAPHIC,
FACSIMILE, OR OTHER REPRODUCTION OF THIS INSTRUMENT IS SUFFICIENT AS A
FINANCING STATEMENT.


 


THIS INSTRUMENT CONTAINS
AFTER-ACQUIRED PROPERTY PROVISIONS, SECURES PAYMENT OF FUTURE ADVANCES, AND
COVERS PROCEEDS OF COLLATERAL.


 


THIS INSTRUMENT COVERS,
AMONG OTHER THINGS, (A) GOODS WHICH ARE OR ARE TO BECOME FIXTURES RELATED
TO THE REAL PROPERTY AND (B) AS-EXTRACTED COLLATERAL RELATED TO THE REAL
PROPERTY (INCLUDING WITHOUT LIMITATION OIL, GAS, OTHER MINERALS AND OTHER
SUBSTANCES OF VALUE WHICH MAY BE EXTRACTED FROM THE EARTH AND ACCOUNTS
ARISING OUT OF THE SALE AT THE WELLHEAD OR MINEHEAD THEREOF).  THIS INSTRUMENT IS TO BE FILED FOR RECORD,
AMONG OTHER PLACES, IN THE REAL ESTATE OR COMPARABLE RECORDS OF THE COUNTIES
REFERENCED IN ANNEX I HERETO AND SUCH FILING SHALL SERVE, AMONG OTHER PURPOSES,
AS A FIXTURE FILING AND AS A FINANCING STATEMENT COVERING AS-EXTRACTED
COLLATERAL.  THE MORTGAGOR HAS AN
INTEREST OF RECORD IN THE REAL ESTATE CONCERNED.


 


A POWER OF SALE HAS BEEN GRANTED
IN THE MORTGAGE (AS HEREINAFTER DEFINED). 
A POWER OF SALE MAY ALLOW AGENT (AS HEREINAFTER DEFINED) OR THE
TRUSTEE (AS HEREINAFTER DEFINED) TO TAKE THE MORTGAGED PROPERTIES AND SELL THEM
WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT BY THE MORTGAGOR
(AS HEREINAFTER DEFINED) UNDER THE MORTGAGE.


 


	
  WHEN RECORDED OR FILED
  RETURN TO:

  	
  THIS DOCUMENT PREPARED
  BY:

  
	
  Vinson &
  Elkins LLP

  	
  Amy Branch

  
	
  1001 Fannin,
  Suite 2300

  	
  Vinson &
  Elkins LLP

  
	
  Houston, Texas
  77002-6760

  	
  1001 Fannin,
  Suite 2300

  
	
  Attention: Linda
  Daugherty

  	
  Houston, Texas
  77002-6760

  



 


The
rights, remedies and obligations of Mortgagor and Agent hereunder are limited
by and subject to the terms of one or more Intercreditor and Collateral Agency
Agreements among Mortgagor, Agent and Approved Hedge Counterparties.


 

















 


This SECOND AMENDMENT TO DEED
OF TRUST, LINE OF CREDIT MORTGAGE, ASSIGNMENT, SECURITY AGREEMENT, FIXTURE
FILING AND FINANCING STATEMENT (this “Second Amendment”) is entered into
as of June 26, 2009 by RESACA EXPLOITATION, INC., a Texas corporation and
CIT CAPITAL USA INC., as collateral agent (“Agent”) for the Secured
Creditors (as defined below).


 


RECITALS


 


A.                                   On May 1, 2006, Resaca Exploitation,
LP (“Original Mortgagor”) executed a Deed of Trust, Line of Credit Mortgage,
Assignment, Security Agreement, Fixture Filing and Financing Statement (the “Original
Mortgage”) in favor of John Homier, Trustee, and NGP Capital Resources
Company, as Agent (the “Original Agent”), counterparts of which are
recorded as set forth on Annex I hereto.


 


B.                                     On July 10, 2008, Original Mortgagor
converted from “Resaca Exploitation, LP, a Delaware limited partnership” into “Resaca
Exploitation, Inc., a Texas corporation” (“Mortgagor”).


 


C.                                     On July 11, 2008, Mortgagor and
Original Agent amended the Original Mortgage by First Amendment to Deed of
Trust, Line of Credit Mortgage, Assignment, Security Agreement, Fixture Filing
and Financing Statement (the “First Amendment” and together with the
Original Mortgage, collectively called the “Mortgage”), counterparts of
which are recorded as set forth on Annex I hereto.


 


D.                                    Pursuant to that certain Assignment of
Deeds of Trust, Line of Credit Mortgages, Assignments, Security Agreements,
Fixture Filings and Financing Statements of even date herewith, Original Agent
has assigned the Mortgage to CIT Capital USA Inc., a Delaware corporation, as
successor Agent (the “Agent”).


 


E.                                      Mortgagor has entered into that certain Second
Amended and Restated Credit Agreement (the “Restated Credit Agreement”) of
even date herewith with the Agent and the lenders named therein (the “Lenders”),
amending and restating that certain Amended and Restated Credit Agreement dated
July 11, 2008 described in the Secured Indebtedness set forth in the
Mortgage, such Amended and Restated Credit Agreement amended and restated that
certain Credit Agreement dated May 1, 2006.


 


F.                                      Pursuant to such Restated Credit
Agreement, Mortgagor has executed in favor of Lenders restated promissory notes
of even date herewith renewing and given in replacement of (but not novating or
extinguishing) the Notes described in the Secured Indebtedness set forth in the
Mortgage (such notes, together with any and all amendments, modifications,
extensions, renewals and replacements thereof, and substitutes therefor, in
whole or in part, are herein collectively called the “Restated Notes”).


 


G.                                     In connection with the Restated Credit
Agreement, Mortgagor and the Agent desire to amend the Mortgage to reflect of
record that (a) all indebtedness and other obligations arising under or
with respect to the Restated Credit Agreement and the Restated 


 


2

















 


Notes are a part of the
indebtedness secured by the Mortgage, as amended hereby, and (b) the
events described in the Recitals D through F have occurred.


 


FOR A GOOD AND VALUABLE
CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, Agent
and Mortgagor do hereby covenant, act and/or agree as follows:


 


1.                                       Note, Loan Documents, Other Obligations.  Section 1.3(a) and
(b) of the Original Mortgage is hereby amended in its
entirety to read as follows:


 


(a)                                  All indebtedness and other obligations now
or hereafter incurred or arising pursuant to the provisions of that certain
Second Amended and Restated Credit Agreement dated June 26, 2009 among
Mortgagor, CIT Capital USA Inc., in its capacity as administrative agent for
the benefit of the lenders thereunder, and such lenders, amending and restating
that certain Amended and Restated Credit Agreement dated July 11, 2008
among Mortgagor, NGP Capital Resources Company, as prior administrative agent,
and the lenders named therein, and all supplements thereto and amendments or
modifications thereof, and all agreements given in substitution therefor or in
restatement, renewal or extension thereof, in whole or in part (such Credit
Agreement, as the same may from time to time be supplemented, amended or modified,
and all other agreements given in substitution therefor or in restatement,
renewal or extension thereof, in whole or in part, being herein collectively
called the “Credit Agreement” and such lenders from time to time a party
thereto, being herein collectively called the “Lenders”) (CIT Capital
USA Inc., in such capacity collateral agent for the Secured Parties (as defined
in the Credit Agreement), is herein called “Agent”);


 


(b)                                 Those certain Restated Promissory Notes
dated June 26, 2009, in the principal amount of $50,000,000 made by
Mortgagor and payable to the order of the Lenders on or before July 1,
2012, and bearing interest as therein provided, given in renewal and
replacement (but not novation or extinguishment) of those certain Promissory
Notes dated July 11, 2008 in the principal amount of $60,000,000 made by
Mortgagor and payable to the order of the lenders named therein, and containing
a provision for the payment of a reasonable additional amount as attorneys’
fees, as the same may from time to time be supplemented, amended or modified,
and all other notes given in substitution therefor or in modification, renewal
or extension thereof, in whole or in part;


 


2.                                       Defined Terms and References.


 


(a) All references in the Mortgage to “this Mortgage” shall be deemed to mean
and refer to the Original Mortgage as amended by the First Amendment and this
Second Amendment, as the same may from time to time be further amended or
supplemented.


 


3

















 


(b) All
references in the Mortgage to the “Credit Agreement” shall be deemed to mean
and refer to the Second Amended and Restated Credit Agreement, dated as of June 26,
2009, by and among the Borrower, the Agent, and the lenders and agents from
time to time party thereto, as the same may from time to time be amended or
supplemented.


 


(c) All references to “John Homier” in his capacity as Trustee
shall be deemed to
mean and refer to “David M. Bornstein”.


 


(d) All references to “NGP Capital Resources Company” are hereby deleted and replaced with “CIT Capital
USA Inc.” and all references to “Agent” shall be deemed to mean and refer to “CIT
Capital USA, Inc.” in its capacity as administrative agent for the lenders
under the Credit Agreement.


 


3.                                       Amendments to Addresses.


 


(a) The
signature page to the Deed of Trust is hereby amended to delete the name
and address listed under “The address of the Agent is:” and to replace such
name and address with the following name and address:


 


CIT Capital USA Inc.


505 Fifth Avenue, 10th Floor


New York, NY 10017


Attn: Marc Theisinger


Telecopy No.: (212) 771-9675


 


with a copy to:


 


CIT Capital USA Inc.


700 Louisiana Street, Suite 5200


Houston, TX 77002


Attn: David Bornstein


Telecopy No. (713) 237-8156


 


(a) The
signature page to the Deed of Trust is hereby amended to delete the name
and address listed under “The address of the Trustee is:” and to replace such
name and address with the following name and address:


 


c/o CIT Capital USA Inc.


700 Louisiana Street, Suite 5200


Houston, TX 77002


Attn: David Bornstein


Telecopy No. (713) 237-8156


 


4.                                       Miscellaneous,
Representations and Warranties.  This Second Amendment
constitutes a “Loan Document”, as such term is defined in the Restated Credit
Agreement.  


 


4

















 


Mortgagor
hereby acknowledges and agrees that except as specifically amended, changed or
modified hereby, the Original Mortgage as amended by the First Amendment and
this Second Amendment shall remain in full force and effect in accordance with
its terms.  None of the rights, titles
and interests existing and to exist under the Original Mortgage are hereby
released, diminished or impaired, and Mortgagor hereby reaffirms all covenants,
representations and warranties made in the Original Mortgage as amended by the
First Amendment and this Second Amendment.


 


5.                                       Counterparts.  This Second Amendment may be executed in
several counterparts and all of such counterparts together shall constitute one
and the same instrument.


 


6.                                       Successors and
Assigns.  The terms, provisions, covenants, representations,
indemnifications and conditions hereof shall be binding upon Mortgagor, and the
successors and assigns of Mortgagor, and shall inure to the benefit of Agent,
Trustee and each person constituting Lender and their respective successors and
assigns, and shall constitute covenants running with the Mortgaged
Properties.  All references in this
Second Amendment to Mortgagor, Agent, Trustee or Lenders shall be deemed to
include all such successors and assigns.


 


[SIGNATURES BEGIN NEXT PAGE]


 


5

















 


IN WITNESS WHEREOF, this
instrument is executed by Mortgagor and Agent this       
day of June, 2009.


 


 


	
  MORTGAGOR:

  	
  RESACA EXPLOITATION, INC.

  
	
   

  	
  (f/k/a Resaca
  Exploitation, LP)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chris Work

  
	
   

  	
   

  	
  Chris
  Work, as Vice President and

  
	
   

  	
   

  	
  Chief
  Financial Officer

  



 


 


	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §

  
	
  COUNTY OF HARRIS

  	
  §

  



 


This instrument was
acknowledged before me this        day of June,
2009 by Chris Work, Vice President and Chief Financial officer of Resaca
Exploitation, Inc., a Texas corporation, on behalf of such corporation.


 


 


	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC, State of
  Texas

  



 


SEAL:


 


 


Signature Page to


Second Amendment to Deed of Trust


(New
Mexico & Texas)


 

















 


	
  AGENT:

  	
  CIT CAPITAL
  USA INC., AS AGENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Bornstein

  
	
   

  	
   

  	
  David
  M. Bornstein, as Vice President

  



 


 


	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §

  
	
  COUNTY OF HARRIS

  	
  §

  



 


This instrument was
acknowledged before me this        day of June,
2009 by David M. Bornstein, Vice President of CIT Capital USA Inc., a Delaware
corporation, on behalf of such corporation.


 


 


	
   

  	
   

  
	
   

  	
  NOTARY PUBLIC, State of
  Texas

  



 


SEAL:


 


 


Signature Page to


Second Amendment to Deed of Trust


(New Mexico & Texas)


 

















 


ANNEX I


 


RECORDING
INFORMATION


 


1.                                       Deed of Trust, Line of Credit Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement dated as of May 1, 2006
from Resaca Exploitation, LP for the benefit of NGP Capital Resources Company,
as Agent, filed as follows:


 


	
  JURISDICTION

  	
   

  	
  FILING INFORMATION

  	
   

  	
  FILE DATE

  
	
  Eddy
  County, New Mexico

  	
   

  	
  Book
  642 Pg 1065

  	
   

  	
  5/08/06

  
	
  Lea
  County, New Mexico

  	
   

  	
  Doc
  # 21694 Book 1441 Pg 670

  	
   

  	
  05/08/06

  
	
  Crane
  County, Texas

  	
   

  	
  Doc
  # 0087094 Vol. 0477 Pg 219

  	
   

  	
  05/06/06

  
	
  Ector
  County, Texas

  	
   

  	
  Doc
  # 00007413 Vol. 2028 Pg 21

  	
   

  	
  05/10/06

  
	
  Howard
  County, Texas

  	
   

  	
  Doc
  # 00002197 Vol. 1007 Pg 154

  	
   

  	
  05/08/06

  
	
  Mitchell
  County, Texas

  	
   

  	
  Vol.
  719 Pg 723

  	
   

  	
  05/08/06

  
	
  Pecos
  County, Texas

  	
   

  	
  Vol.
  346 Pg 309

  	
   

  	
  05/08/06

  
	
  Winkler
  County, Texas

  	
   

  	
  Vol.
  537 Pg 661

  	
   

  	
  05/08/06

  



 


2.                                       First Amendment to Deed of Trust, Line of Credit Mortgage,
Assignment, Security Agreement, Fixture Filing and Financing Statement dated as
of July 11, 2008 from Resaca Exploitation, Inc. for the benefit of
NGP Capital Resources Company, as Agent, filed as follows:


 


	
  JURISDICTION

  	
   

  	
  FILING INFORMATION

  	
   

  	
  FILE DATE

  
	
  Eddy
  County, New Mexico

  	
   

  	
  Book
  0752 Pg 0296

  	
   

  	
  09/11/08

  
	
  Lea
  County, New Mexico

  	
   

  	
  Doc
  # 61041 Book 1600 Pg 799

  	
   

  	
  09/11/08

  
	
  Crane
  County, Texas

  	
   

  	
  Vol.
  498 Pg 651

  	
   

  	
  09/12/08

  
	
  Ector
  County, Texas

  	
   

  	
  Vol.
  2281 Pg 646

  	
   

  	
  09/12/08

  
	
  Howard
  County, Texas

  	
   

  	
  Vol.
  1110 Pg 642

  	
   

  	
  09/11/08

  
	
  Mitchell
  County, Texas

  	
   

  	
  Vol.
  746 Pg 493

  	
   

  	
  09/11/08

  
	
  Pecos
  County, Texas

  	
   

  	
  Vol.
  364 Pg 38

  	
   

  	
  09/11/08

  
	
  Winkler
  County, Texas

  	
   

  	
  Doc
  # C1101

  	
   

  	
  09/11/08