Document:

Exhibit
10.90

 

Execution Version

 

FIRST AMENDMENT

 

TO

 

SECOND AMENDED AND RESTATED
CREDIT AGREEMENT

 

Dated as of December 22,
2009

 

AMONG

 

RESACA EXPLOITATION, INC.,

 

AS BORROWER,

 

RESACA OPERATING COMPANY,

 

AS GUARANTOR,

 

CIT CAPITAL USA INC.,

 

AS ADMINISTRATIVE AGENT

 

AND

 

THE LENDERS PARTY HERETO

 

 

FIRST AMENDMENT TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT (this “First
Amendment”), dated as of December 22, 2009, is among Resaca Exploitation, Inc.,
a Texas corporation (“Borrower”), Resaca Operating Company, a Texas
corporation (the “Guarantor”), each of the lenders party to the Credit
Agreement referred to below (collectively, the “Lenders”), and CIT
Capital USA Inc., as administrative agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Administrative Agent”).

 

R E C I T A L S

 

A.            The Borrower, the Administrative
Agent and the Lenders are parties to that certain Second Amended and Restated Credit
Agreement dated as of June 26, 2009 (the “Credit Agreement”),
pursuant to which the Lenders have made certain loans and extensions of credit
available to and on behalf of the Borrower.

 

B.            The Borrower and the Guarantor have requested
and the Administrative Agent and the Lenders have agreed to amend and waive certain
provisions of the Credit Agreement.

 

C.            NOW, THEREFORE, to induce the Administrative
Agent and the Lenders to enter into this First Amendment and in consideration
of the premises and the mutual covenants herein contained, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

Section 1.                  Defined Terms.  Each capitalized term used herein but not
otherwise defined herein has the meaning given such term in the Credit
Agreement, as amended by this First Amendment. 
Unless otherwise indicated, all section references in this First
Amendment refer to sections of the Credit Agreement.

 

Section 2.                  Amendments to Credit Agreement.

 

2.1           Amendments to Section 1.1.

 

(a)     The
definition of “Agreement” is hereby amended in its entirety to read as
follows:

 

“Agreement”
means this Second Amended and Restated Credit Agreement, as amended by that
certain First Amendment and as the same may be amended or supplemented from
time to time.

 

(b)      The
following definition is hereby added where alphabetically appropriate to read
as follows:

 

“First
Amendment” means that certain First Amendment to Second Amended and
Restated Credit Agreement, dated as of December 22, 2009, among

 

 

the
Borrower, the Guarantor, the Administrative Agent and the Lenders party
thereto.

 

2.2           Monthly Reporting of Cash Balances.  Section 8.2(n) is hereby added which reads as
follows:

 

(n)           Monthly Cash Balances.  Within ten (10) Business Days after the
end of each calendar month, a statement of a Responsible Officer certifying
that the Borrower had, on a Consolidated basis, aggregate cash and Cash
Equivalents on hand as of the last day of the immediately preceding calendar
month of not less than $500,000 and attaching statements of the financial
institutions or securities intermediaries where such cash and Cash Equivalents
are held demonstrating such balance.

 

2.3           Amendments to Section 9.11.  Section 9.11 is hereby amended to read as
follows:

 

Section 9.11           Financial Covenants.

 

(a)           Current Ratio.  The Borrower will not permit the ratio of (i) aggregate
consolidated current assets (including any amounts available hereunder not
dedicated to Approved Development Activities) to (ii) aggregate
consolidated current liabilities (excluding current maturities of the Notes) to
be less than 1.0 to 1.0 at any time.  For
purposes of this calculation the mark-to-market portion of any Hedge Contract
shall be excluded from the calculation of both consolidated current assets and
consolidated current liabilities.

 

(b)           Debt to Consolidated EBITDA Ratio.  As of the end of each Fiscal Quarter,
commencing December 31, 2009, the Borrower will not permit the ratio of (i) Consolidated
Funded Indebtedness (other than Indebtedness permitted under Section 9.1(b)),
including the Obligations, to (ii) Consolidated EBITDA, to be greater than
(A) 6.5 to 1.0 for the Fiscal Quarter ending December 31, 2009, (B) 6.0
to 1.0 for the Fiscal Quarters ending March 31, 2010 and June 30,
2010, (C) 5.5 to 1.0 for the Fiscal Quarter ending September 30,
2010, and (D) 5.0 to 1.0 for the Fiscal Quarter ending December 31,
2010 and each Fiscal Quarter thereafter; provided that
Consolidated EBITDA for the Fiscal Quarters ending December 31, 2009, March 31,
2010, and June 30, 2010 shall be calculated as follows:

 

(i)            for
the Fiscal Quarter ending December 31, 2009, Consolidated EBITDA shall be
Consolidated EBITDA for the four-month period ending on such date multiplied by
three.

 

(ii)           for
the Fiscal Quarter ending March 31, 2010, Consolidated EBITDA shall be
Consolidated EBITDA for the seven-month period ending on such date multiplied
by twelve/ sevenths.

 

2

 

(iii)          for
the Fiscal Quarter ending June 30, 2010, Consolidated EBITDA shall be
Consolidated EBITDA for the ten-month period ending on such date multiplied by
1.2.

 

Thereafter, Consolidated
EBITDA for each Fiscal Quarter shall be calculated using Consolidated EBITDA
for the period of four Fiscal Quarters ending on the last day of such Fiscal
Quarter.

 

(c)           Interest Coverage Ratio.  As of the end of each Fiscal Quarter,
commencing December 31, 2009, the Borrower will not permit the ratio of (i) Consolidated
EBITDA to (ii) cash interest payments (other than interest payments on
Indebtedness permitted under Section 9.1(b)) (“Interest Expense”)
made during such period, to be less than (A) 1.75 to 1.0 for the Fiscal
Quarter ending December 31, 2009, and (B) 2.0 to 1.0 for each Fiscal
Quarter thereafter; provided that
Consolidated EBITDA and Interest Expense for the Fiscal Quarters ending December 31,
2009, March 31, 2010, June 30, 2010 shall be calculated as follows:

 

(i)            for
the Fiscal Quarter ending December 31, 2009, Consolidated EBITDA and
Interest Expense shall be Consolidated EBITDA and Interest Expense for the
four-month period ending on such date multiplied by three.

 

(ii)           for
the Fiscal Quarter ending March 31, 2010, Consolidated EBITDA and Interest
Expense shall be Consolidated EBITDA and Interest Expense for the seven-month
period ending on such date multiplied by twelve/ sevenths.

 

(iii)          for
the Fiscal Quarter ending June 30, 2010, Consolidated EBITDA and Interest
Expense shall be Consolidated EBITDA and Interest Expense for the ten-month
period ending on such date multiplied by 1.2.

 

Thereafter, Consolidated
EBITDA and Interest Expense for each Fiscal Quarter shall be calculated using
Consolidated EBITDA and Interest Expense for the period of four Fiscal Quarters
ending on the last day of such Fiscal Quarter.

 

(d)           Asset Coverage Ratio.  The Borrower will not, as of any date of
determination, permit its ratio of Total Reserve Value to Consolidated Funded
Indebtedness (other than Indebtedness permitted under Section 9.1(b)),
including the Obligations as of such date to be less 1.75 to 1.00.

 

(e)           G & A Expenses.  The Borrower will not permit the general and
administrative expenses of the Borrower and its Subsidiaries on a consolidated
basis to exceed $2,500,000 per year for the year following the Closing Date; provided that such general and administrative expenses can
be increased by $250,000 each successive 12-month period so long as the
Borrower is not in Default under this Section 9.11.  General and administrative expenses for
purposes of this Section 9.1(e) shall not include non-cash items or
transaction 

 

3

 

costs,
expenses and charges with respect to acquisitions deducted from Consolidated
Net Income pursuant to SFAS 141(R), provided that such exclusion from general
and administrative expenses for such non-cash items, transaction costs,
expenses and charges incurred after December 22, 2009 shall not exceed
$400,000 in the aggregate.  For purposes
of this Section 9.1(e) any general and administrative expenses
incurred by the Borrower on behalf of any related Person and not reimbursed to
the Borrower in cash within sixty (60) days after the incurrence thereof shall
be included in the general and administrative expenses of the Borrower.

 

(f)            Minimum Monthly Cash Balance.  As of the close of business on the last day
of each calendar month, commencing with the calendar month of January, 2010,
the Borrower will not permit its sum of aggregate cash on hand plus Cash
Equivalents to be less than $500,000.

 

Section 3.                  Covenant Waivers.

 

3.1           The Borrower has informed the Administrative Agent that it
is unable to comply with Section 9.11(b) [Debt to Consolidated EBITDA Ratio]
and Section 9.11(c) [Interest Coverage Ratio] for the Fiscal Quarter ending
September 30, 2009 (the “Designated Defaults”).  Therefore, the Borrower hereby requests, and
the Administrative Agent and the Lenders hereby agree to waive the Designated
Defaults.  Except as expressly waived
herein, all covenants, obligations and agreements of the Borrower contained in
the Credit Agreement and the other Loan Documents shall remain in full force
and effect in accordance with their terms.

 

3.2           Neither the execution by the Administrative Agent or the
Lenders of this First Amendment, nor any other act or omission by the
Administrative Agent or the Lenders or their officers in connection herewith,
shall be deemed a waiver by the Administrative Agent or the Lenders of any
other defaults which may exist, which may have occurred prior to the Designated
Defaults or which may occur in the future under the Credit Agreement and/or the
other Loan Documents, or any future defaults of the same provision waived
hereunder (collectively “Other Violations”).  Similarly, nothing contained in this First
Amendment shall directly or indirectly in any way whatsoever either: (i)
impair, prejudice or otherwise adversely affect the Administrative Agent’s or
the Lenders’ right at any time to exercise any right, privilege or remedy in
connection with the Loan Documents with respect to any Other Violations, (ii)
amend or alter any provision of the Credit Agreement, the other Loan Documents,
or any other contract or instrument, or (iii) constitute any course of dealing
or other basis for altering any obligation of the Borrower or the Guarantor or
any right, privilege or remedy of the Administrative Agent or the Lenders under
the Credit Agreement, the other Loan Documents, or any other contract or
instrument.  Nothing in this letter shall
be construed to be a consent by the Administrative Agent or the Lenders to any
Other Violations.

 

Section 4.                  Conditions Precedent.  This First Amendment shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 12.02 of the Credit Agreement):

 

4

 

4.1           The Administrative
Agent shall have received from each party hereto, counterparts (in such number
as may be requested by the Administrative Agent) of this First Amendment signed
on behalf of such Person.

 

4.2           The Administrative
Agent shall have received for the ratable benefit of the Lenders (to be shared
based upon each Lender’s respective Percentage Share) an amendment and waiver
fee equal to $87,500 and all other fees and other amounts due and payable,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder (including, without limitation, the fees and expenses of Vinson &
Elkins L.L.P., counsel to the Administrative Agent).

 

4.3           At the time of and
immediately after giving effect to the terms of this First Amendment, no
Default shall have occurred and be continuing.

 

4.4           The Administrative
Agent shall have received such other documents as the Administrative Agent or
its special counsel may reasonably require.

 

The
Administrative Agent is hereby authorized and directed to declare this First
Amendment to be effective when it has received documents confirming or
certifying, to the satisfaction of the Administrative Agent, compliance with
the conditions set forth in this Section 4 or the waiver of such
conditions as permitted hereby. Such declaration shall be final, conclusive and
binding upon all parties to the Credit Agreement for all purposes.

 

Section 5.                  Miscellaneous.

 

5.1           Confirmation. 
The provisions of the Credit Agreement, as amended by this First
Amendment, shall remain in full force and effect following the effectiveness of
this First Amendment.

 

5.2           Ratification and Affirmation; Representations and
Warranties.  Each of the Borrower and
the Guarantor hereby (a) acknowledges the terms of this First Amendment; (b) ratifies
and affirms its obligations under, and acknowledges, renews and extends its
continued liability under, each Loan Document to which it is a party and agrees
that each Loan Document to which it is a party remains in full force and
effect, except as expressly amended hereby, notwithstanding the amendments
contained herein and (c) represents and warrants to the Lenders that as of
the date hereof, after giving effect to the terms of this First Amendment:  (i) all of the representations and
warranties contained in each Loan Document to which it is a party are true and
correct, except to the extent any such representations and warranties are
expressly limited to an earlier date, in which case, such representations and
warranties shall continue to be true and correct as of such specified earlier
date, (ii) no Default or Event of Default has occurred and is continuing
and (iii) no event or events have occurred which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.

 

5.3           Counterparts. 
This First Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts
taken together shall be deemed to constitute one and the same instrument.  Delivery of this First Amendment by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof.

 

5

 

5.4           NO ORAL AGREEMENT. 
THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS
EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO SUBSEQUENT ORAL AGREEMENTS
BETWEEN THE PARTIES.

 

5.5           GOVERNING LAW. 
THIS FIRST AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND
ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.

 

5.6           Payment of Expenses.  The Borrower agrees to pay or reimburse the
Administrative Agent for all of its out-of-pocket costs and expenses incurred
in connection with this First Amendment, any other documents prepared in
connection herewith and the transactions contemplated hereby, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent.

 

5.7           Severability. 
Any provision of this First Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

5.8           Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and its respective successors and
assigns.

 

5.9           RELEASE
OF LENDERS.    IN CONSIDERATION OF THIS
FIRST AMENDMENT AND, SUBJECT TO THE CONDITIONS STATED HEREIN, EACH OF THE
BORROWER AND THE GUARANTOR HEREBY RELEASES, ACQUITS, FOREVER DISCHARGES, AND
COVENANTS NOT TO SUE, THE ADMINISTRATIVE AGENT AND EACH OF THE LENDERS, ALONG
WITH ALL OF THEIR BENEFICIARIES, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES,
SERVANTS, ATTORNEYS AND REPRESENTATIVES, AS WELL AS THEIR RESPECTIVE HEIRS,
EXECUTORS, LEGAL REPRESENTATIVES, ADMINISTRATORS, PREDECESSORS IN INTEREST,
SUCCESSORS AND ASSIGNS (EACH INDIVIDUALLY, A “RELEASED PARTY” AND
COLLECTIVELY, THE “RELEASED PARTIES”)
FROM ANY AND ALL CLAIMS, DEMANDS, DEBTS, LIABILITIES, SUITS, OFFSETS AGAINST
THE INDEBTEDNESS EVIDENCED BY THE LOAN DOCUMENTS AND ACTIONS, CAUSES OF ACTION
OR CLAIMS FOR RELIEF OF WHATEVER KIND OR NATURE, WHETHER KNOWN OR UNKNOWN,
SUSPECTED OR UNSUSPECTED BY BORROWER OR THE GUARANTOR, WHICH THE BORROWER, THE
GUARANTOR, OR ANY SUBSIDIARY MAY HAVE OR WHICH MAY HEREAFTER ACCRUE
RELATED TO ANY ACTIONS OR FACTS OCCURRING PRIOR TO THE DATE OF THIS FIRST
AMENDMENT AGAINST ANY RELEASED PARTY, FOR OR BY REASON OF ANY MATTER, CAUSE OR
THING 

 

6

 

WHATSOEVER
OCCURRING ON OR PRIOR TO THE DATE OF THIS FIRST AMENDMENT, WHICH RELATE TO, IN
WHOLE OR IN PART, DIRECTLY OR INDIRECTLY THE CREDIT AGREEMENT, ANY NOTE, ANY
SECURITY DOCUMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS EVIDENCED
THEREBY, INCLUDING, WITHOUT LIMITATION, ANY DISBURSEMENTS UNDER THE CREDIT
AGREEMENT, ANY NOTES, THE NEGOTIATION OF ANY OF THE CREDIT AGREEMENT, THE
NOTES, OR THE OTHER LOAN DOCUMENTS, THE TERMS THEREOF, OR THE APPROVAL,
ADMINISTRATION, ENFORCEMENT OR SERVICING THEREOF.

 

[SIGNATURES BEGIN NEXT PAGE]

 

7

 

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

 

 

	
   

  	
  RESACA EXPLOITATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lou Fry

  
	
   

  	
  Name: Mary Lou Fry

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RESACA OPERATING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lou Fry

  
	
   

  	
  Name: Mary Lou Fry

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CIT CAPITAL USA INC.,

  
	
   

  	
  as the Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GE Mckean

  
	
   

  	
  Name: George E. Mckean

  
	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CIT BANK,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Benjamin Haslam

  
	
   

  	
  Name: Benjamin Haslam

  
	
   

  	
  Title: Authorized
  Signatory 

  

 

Signature
Page to First Amendment to Second Amended and Restated Credit Agreement

(Resaca
Exploitation, Inc.)

 

 

	
   

  	
  NGP CAPITAL RESOURCES COMPANY,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ R. Kelly Plato

  
	
   

  	
  R. Kelly Plato, as Senior
  Vice President

  

 

Signature
Page to First Amendment to Second Amended and Restated Credit Agreement

(Resaca
Exploitation, Inc.)Exhibit 10.91

 

RESACA EXPLOITATION, INC.

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

 

Optionee:  Keith
Turner

 

1.             Grant of
Stock Option.  As of the Grant
Date (identified in Section 18 below), Resaca
Exploitation, Inc., a Texas corporation (the “Company”) hereby grants a Nonqualified Stock Option (the “Option”) to the Optionee (identified above), an Employee of the Company, to purchase the number of shares of
the Company’s common stock, $0.01 par value per share (the “Common Stock”), identified in Section 18
below (the “Shares”), subject to
the terms and conditions of this agreement (the “Agreement”) and the Resaca Exploitation, Inc. 2008 Stock
Incentive Plan (the “Plan”).  The Plan is hereby incorporated herein in its
entirety by reference.  The Shares, when
issued to Optionee upon the exercise of the Option, shall be fully paid and
nonassessable.  The Option is not an “incentive
stock option” as defined in Section 422 of the Internal Revenue Code.

 

2.             Definitions.  All capitalized
terms used herein shall have the meanings set forth in the Plan unless
otherwise provided herein. Section 18 sets forth meanings for
certain of the capitalized terms used in this Agreement.

 

3.             Option Term.  The Option shall commence on
the Grant Date (identified in Section 18 below) and terminate on
the eighth (8th) anniversary of the Grant Date as specified in Section 18.
The period during which the Option is in effect and may be exercised is
referred to herein as the “Option Period”.

 

4.             Option
Price. 
The Option Price per Share is identified in Section 18.

 

5.             Vesting.  The total number of Shares
subject to this Option shall vest in accordance with the Vesting Schedule (described in Section 18).  The Shares may be purchased at any time after
they become vested, in whole or in part, during the Option Period; provided,
however, the Option may only be exercisable to acquire whole Shares.  The right of exercise provided herein shall
be cumulative so that if the Option is not exercised to the maximum extent
permissible after vesting, the vested portion of the Option shall be
exercisable, in whole or in part, at any time during the Option Period.

 

6.             Method of
Exercise.  The Option is exercisable by delivery of a
written notice to the Secretary of the Company, signed by the Optionee,
specifying the number of Shares to be acquired on, and the effective date of,
such exercise.  The Optionee may withdraw
notice of exercise of this Option, in writing, at any time prior to the close
of business on the business day that immediately precedes the proposed exercise
date.

 

7.             Method of
Payment.  Subject to applicable provisions of the Plan,
the Option Price upon exercise of the Option shall be payable to the Company in
full either: (i) in cash or its equivalent; (ii) subject to prior
approval by the Committee in its discretion, by tendering previously acquired
Shares having an aggregate Fair Market Value (as defined in the Plan) at the
time of exercise equal to the total Option Price; (iii) subject to prior
approval by the Committee 

 

 

in its discretion, by withholding Shares
which otherwise would be acquired on exercise having an aggregate Fair Market
Value at the time of exercise equal to the total Option Price; or (iv) any
other permitted method pursuant to the applicable terms and conditions of the Plan.

 

As soon as practicable after receipt of a
written notification of exercise and full payment, the Company shall deliver to
or on behalf of the Optionee, in the name of the Optionee or other appropriate
recipient, Share certificates or other evidence of ownership for the number of
Shares purchased under the Option.

 

8.             Restrictions
on Exercise. 
The Option may not be exercised if the issuance of such Shares or the
method of payment of the consideration for such Shares would constitute a
violation of any applicable federal or state securities or other laws or
regulations, or any rules or regulations of any stock exchange on which
the Common Stock is listed.  In addition,
Optionee understands and agrees that the Option cannot be exercised if the
Company determines that such exercise, at the time of such exercise, will be in
violation of the Company’s insider trading policy.

 

9.             Termination
of Employment. 
Voluntary or involuntary termination of Employment shall affect
Optionee’s rights under the Option as follows:

 

(a)           Termination for Cause.  The non-vested portion of the Option shall
expire and terminate on the date of termination of Employment and shall not be
exercisable to any extent if Optionee’s Employment is terminated for Cause (as
defined in the Plan at the time of such termination of Employment).  The vested portion of the Option shall expire
on the thirty (30) day anniversary of the termination of Employment to the
extent not previously exercised by Optionee. 
In no event may the Option be exercised after the earlier of (i) the
expiration of the Option Period or (ii) the thirty (30) day anniversary of
the date of termination of Employment for Cause.

 

(b)           Voluntary Termination or
Retirement.  If Optionee’s Employment
is voluntarily terminated by Optionee or terminated for Retirement, then (i) the
non-vested portion of the Option shall immediately expire on the termination
date and (ii) the vested portion of the Option shall expire to the extent
not previously exercised before the one
(1) year anniversary of the date of such termination of
Employment.  In no event may the Option
be exercised after the earlier of (i) the expiration of the Option Period
or (ii) the one (1) year
anniversary of the date of termination of Employment due to voluntary
termination or Retirement.

 

(c)           Death or Disability.  If Optionee’s Employment is terminated due to
death or Disability (as defined in the Plan at the time of such termination),
then (i) the Option shall immediately become fully vested on the
termination of Employment date and  (ii) the
vested portion of the Option shall expire on the one (1) year anniversary
date of the termination of Employment date to the extent not previously
exercised by Optionee or, in the case of death, by the person or persons to
whom Optionee’s rights under the Option have passed by will or by the laws of
descent and distribution or, in the case of Disability, by Optionee or Optionee’s
legal representative.  In no event may
the Option be exercised 

 

2

 

by anyone on or after the
earlier of (i) the expiration of the Option Period or (ii) one (1) year
after the date of termination of Employment due to Optionee’s death or
Disability.

 

(d)           Other Involuntary Termination.  If Optionee’s Employment is terminated for
any reason other than for Cause, Retirement, death or Disability, or voluntary
termination, then (i) the Option shall immediately become fully vested on
the termination of Employment date and (ii) the vested portion of the
Option shall expire to the extent not previously exercised within one (1) year  after such termination date.  In no event may the Option be exercised by
anyone after the earlier of (i) the expiration of the Option Period or (ii) one
(1) year after the termination of Employment date even if Optionee becomes
deceased during such period.  The
termination of Employment of Optionee due to or as a result of the termination
or expiration of the Co-Employer Agreement, dated July 11, 2008, by and
between the Company and Torch Energy Advisors Incorporated shall be considered
an involuntary termination of Optionee’s Employment for purposes of this
Agreement.

 

10.          Independent
Legal and Tax Advice.  Optionee acknowledges that the Company has
advised Optionee to obtain independent legal and tax advice regarding the grant
and exercise of the Option and the disposition of any Shares acquired thereby.

 

11.          Reorganization
of Company.  The existence of the Option shall not
affect  in any way the right or power of
the Company or its shareholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in Company’s capital
structure or its business, or any merger or consolidation of the Company, or
any issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Shares or the rights thereof, or the dissolution or liquidation
of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar character
or otherwise.

 

12.          Adjustment
of Shares. 
In the event of stock dividends, spin-offs of assets or other
extraordinary dividends, stock splits, combinations of shares,
recapitalizations, mergers, consolidations, reorganizations, liquidations,
issuances of rights or warrants and similar transactions or events involving
Company, appropriate adjustments shall be made to the terms and provisions of
the Option as provided in the Plan.

 

13.          No Rights
in Shares. 
Optionee shall have no rights as a shareholder in respect of the Shares
until the Optionee becomes the record holder of such Shares.

 

14.          Investment
Representation.  Optionee will enter into
such written representations, warranties and agreements as Company may
reasonably request in order to comply with any federal or state securities
law.  Moreover, any stock certificate for
any Shares issued to Optionee hereunder may contain a legend restricting their
transferability as determined by the Company in its discretion.  Optionee agrees that Company shall not be
obligated to take any affirmative action in order to cause the issuance or
transfer of Shares hereunder to comply with any law, rule or regulation
that applies to the Shares subject to the Option.

 

15.          No
Guarantee of Employment.  The Option shall not confer upon Optionee any
right to continued employment with the Company or any affiliate thereof.

 

3

 

16.          Withholding
of Taxes.  The Company shall have the right to (a) make
deductions from the number of Shares otherwise deliverable upon exercise of the
Option in an amount sufficient to satisfy withholding of any federal, state or
local taxes required by law, or (b) take such other action as may be
necessary or appropriate to satisfy any such tax withholding obligations.

 

17.          General.

 

(a)           Notices.  All notices under this Agreement shall be
mailed or delivered by hand to the parties at their respective addresses set
forth beneath their signatures below or at such other address as may be
designated in writing by either of the parties to one another, or to their
permitted transferees if applicable. 
Notices shall be effective upon receipt.

 

(b)           Shares Reserved.  The Company shall at all times during the
Option Period reserve and keep available under the Plan such number of Shares
as shall be sufficient to satisfy the requirements of this Option.

 

(c)           Transferability of Option.  The Option is transferable only to the extent
permitted under the Plan at the time of transfer (i) by will or by the
laws of descent and distribution, (ii) by a qualified domestic relations
order (as defined in Section 414(p) of the Internal Revenue Code), or
(iii) to Optionee’s Immediate Family or entities established for the
benefit of, or solely owned by, the Optionee’s Immediate Family, but only to
the extent permitted under the Plan.  No
right or benefit hereunder shall in any manner be liable for or subject to any
debts, contracts, liabilities, obligations or torts of Optionee or any
permitted transferee thereof.

 

(d)           Amendment and Termination.  No amendment, modification or termination of
this Agreement shall be made at any time without the written consent of
Optionee and Company.

 

(e)           No Guarantee of Tax Consequences.  The Company makes no commitment or guarantee
that any tax treatment will apply or be available to Optionee or any other
person.  The Optionee has been advised,
and provided with the opportunity, to obtain independent legal and tax advice
regarding the grant and exercise of the Option and the disposition of any
Shares acquired thereby.

 

(f)            Severability.  In the event that any provision of this
Agreement shall be held illegal, invalid, or unenforceable for any reason, such
provision shall be fully severable, but shall not affect the remaining
provisions of the Agreement, and the Agreement shall be construed and enforced
as if the illegal, invalid, or unenforceable provision had not been included
herein.

 

(g)           Supersedes Prior Agreements.  This Agreement shall supersede and replace
all prior agreements and understandings, oral or written, between the Company
and the Optionee regarding the grant of the Options covered hereby.

 

4

 

(h)           Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Texas, without regard to its conflict
of law provisions, to the extent federal law does not supersede and preempt
Texas law.

 

18.          Definitions
and Other Terms.  The following capitalized
terms shall have those meanings set forth opposite them:

 

	
  (a)

  	
   

  	
  Optionee:

  	
   

  	
  Keith Turner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  Grant Date:

  	
   

  	
  November 16, 2009

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c)

  	
   

  	
  Shares:

  	
   

  	
  Two Hundred Thousand (200,000) Shares of the Company’s Common Stock.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d)

  	
   

  	
  Option Price:

  	
   

  	
  46.5 pence per Share

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e)

  	
   

  	
  Option Period:

  	
   

  	
  November 16, 2009 through November 16, 2017 (until
  5:00 p.m. CST).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  Vesting Schedule:  Options covered by this Option Agreement
  shall become vested, provided that, subject to Section 9,
  Optionee is then, and continuously from the Grant Date has been, an Employee of the Company, in accordance
  with the following schedule:

  

 

	
  Vesting Date

  	
   

  	
  Vested %

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  First Anniversary of the
  Grant Date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Second Anniversary of the
  Grant Date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Third Anniversary of the
  Grant Date

  	
   

  	
  33 1/3

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  100

  	
  %

  

 

Notwithstanding the above vesting schedule,
in the event of a “Change in Control” of the Company (as defined in the Plan at
the time of such event), the non-vested portion of the Option shall become
immediately 100% vested as of the Change in Control date.

 

[Signature page follows]

 

5

 

IN WITNESS
WHEREOF, the Company, as of the Grant Date, has caused this Agreement to be
executed on its behalf by its duly authorized officer and Optionee has hereunto
executed this Agreement as of the same date.

 

	
   

  	
  RESACA EXPLOITATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Lou Fry

  
	
   

  	
  Name:

  	
  Mary Lou Fry

  
	
   

  	
  Title: 

  	
  Vice President and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  	
   

  
	
   

  	
  Resaca Exploitation, Inc.

  
	
   

  	
  1331 Lamar Street, Suite 1450

  
	
   

  	
  Houston, TX 77010

  
	
   

  	
  Attn: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ R. Keith Turner

  
	
   

  	
  KEITH TURNER

  
	
   

  	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  3302 McMahon Lane

  
	
   

  	
  Missouri City, Texas 77459

  

 

6

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