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EXHIBIT 10.16
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment")
is made and entered into effective as of the 30th day of June, 1997, by and
among SOUTHERN MINERAL CORPORATION, a Nevada corporation (the "Borrower"), SMC
PRODUCTION CO., a Texas corporation, SPRUCE HILLS PRODUCTION COMPANY, INC., a
Delaware corporation and BEC ENERGY, INC., a Texas corporation (collectively,
the "Co-Borrowers") and COMPASS BANK, a Texas state chartered banking
institution ("Lender").
W I T N E S S E T H:
WHEREAS, the Borrower, the Co-Borrowers and Lender did execute
and exchange counterparts of that certain Credit Agreement dated December 20,
1995, executed in connection with a revolving loan extended to the Borrowers by
Lender as amended by First Amendment effective as of June 1, 1996, by letter
amendment dated August 30, 1996, by letter amendment dated January 22, 1997, by
Second Amendment to Credit Agreement effective as of December 17, 1996, and by
Third Amendment to Credit Agreement effective as of June 10, 1997 (the "Credit
Agreement");
WHEREAS, the parties hereto desire to amend the Credit
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained in the Credit Agreement and this Amendment, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
I.1 Terms Defined Above. As used herein, each of the
terms "Amendment," "Borrowers," "Co-Borrowers," "Lender," and "Credit
Agreement" shall have the meaning assigned to such term hereinabove.
I.2 Terms Defined in Credit Agreement. As used herein,
each term defined in the Credit Agreement shall have the meaning assigned
thereto in the Credit Agreement, unless expressly provided herein to the
contrary.
I.3 References. References in this Amendment to Article
or Section numbers shall be to Articles and Sections of this Amendment, unless
expressly stated to the contrary. References in this Amendment to "hereby,"
"herein," "hereinafter," "hereinabove," "hereinbelow," "hereof," and
"hereunder" shall be to this Amendment in its entirety and not only to the
particular Article or Section in which such reference appears.
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I.4 Articles and Sections. This Amendment, for
convenience only, has been divided into Articles and Sections and it is
understood that the rights, powers, privileges, duties, and other legal
relations of the parties hereto shall be determined from this Amendment as an
entirety and without regard to such division into Articles and Sections and
without regard to headings prefixed to such Articles and Sections.
I.5 Number and Gender. Whenever the context requires,
reference herein made to the single number shall be understood to include the
plural and likewise the plural shall be understood to include the singular.
Words denoting sex shall be construed to include the masculine, feminine, and
neuter, when such construction is appropriate, and specific enumeration shall
not exclude the general, but shall be construed as cumulative. Definitions of
terms defined in the singular and plural shall be equally applicable to the
plural or singular, as the case may be.
ARTICLE II
AMENDMENTS TO Credit AGREEMENT
The Credit Agreement is hereby amended as follows:
II.1 Amendment of Section 2.7. Section 2.7(a) of the
Credit Agreement is hereby amended to read as follows:
"2.7 Borrowing Base Determinations. (a) The Borrowing Base
as of June 30, 1997, is acknowledged by the Borrower, the Co-Borrowers
and the Lender to be $26,000,000. Commencing on August 1, 1997, and
continuing thereafter on the first day of each calendar month until
the earlier of the date such amount is redetermined or the Commitment
Termination Date, the amount of the Borrowing Base shall be reduced by
$300,000."
ARTICLE III
CONDITIONS
The obligation of the Lender to amend the Credit Agreement as
provided herein is subject to the fulfillment of the following conditions
precedent:
III.1 Receipt of Documents and Other Items. The Lender
shall have received, reviewed, and approved the following documents and other
items, appropriately executed when necessary and in form and substance
satisfactory to the Lender:
(a) multiple counterparts of this Amendment executed by
the
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Borrowers, as requested by the Lender;
(b) Security Agreement (Stock Pledge) of stock of SMC
Ecuador, Inc.; and
(c) such other agreements, documents, items, instruments,
opinions, certificates, waivers, consents, and evidence as the Lender
may reasonably request.
III.2 Accuracy of Representations and Warranties. The
representations and warranties contained in Article IV of the Credit Agreement
and in any other Loan Document shall be true and correct, except as affected by
the transactions contemplated in the Credit Agreement and this Amendment.
III.3 Matters Satisfactory to Lender. All matters
incident to the consummation of the transactions contemplated hereby shall be
satisfactory to the Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and each of the Co-Borrowers hereby expressly
re-makes, in favor of the Lender, all of the representations and warranties set
forth in Article IV of the Credit Agreement and set forth in any other Loan
Document to which it is a party, and represents and warrants that all such
representations and warranties remain true and unbreached, except as affected
by the transactions contemplated in the Credit Agreement and this Amendment.
ARTICLE V
RATIFICATION
Each of the parties hereto does hereby adopt, ratify, and
confirm the Credit Agreement and the other Loan Documents to which it is a
party, in all things in accordance with the terms and provisions thereof, as
amended by this Amendment and the documents executed in connection herewith.
ARTICLE VI
MISCELLANEOUS
VI.1 Scope of Amendment. The scope of this Amendment is
expressly limited
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to the matters addressed herein and this Amendment shall not operate as a waiver
of any past, present, or future breach, Default, or Event of Default under the
Credit Agreement, except to the extent, if any, that any such breach, Default,
or Event of Default is remedied by the effect of this Amendment.
VI.2 Credit Agreement as Amended. All references to the
Credit Agreement in any document heretofore or hereafter executed in connection
with the transactions contemplated in the Credit Agreement shall be deemed to
refer to the Credit Agreement as amended by this Amendment.
VI.3 Parties in Interest. All provisions of this
Amendment shall be binding upon and shall inure to the benefit of the Borrower,
the Co-Borrowers, the Lender, and their respective successors and permitted
assigns.
VI.4 Rights of Third Parties. All provisions herein are
imposed solely and exclusively for the benefit of the parties hereto and their
respective successors and permitted assigns. No other Person shall have
standing to require satisfaction of such provisions in accordance with their
terms and any or all of such provisions may be freely waived in whole or in
part by the Lender at any time if in its sole discretion it deems it advisable
to do so.
VI.5 Entire Agreement. THIS AMENDMENT CONSTITUTES THE
ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT HEREOF
AND SUPERSEDES ANY PRIOR AGREEMENT, WHETHER WRITTEN OR ORAL, AMONG SUCH PARTIES
REGARDING THE SUBJECT HEREOF. FURTHERMORE IN THIS REGARD, THIS AMENDMENT, THE
CREDIT AGREEMENT, AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT, COLLECTIVELY,
THE FINAL AGREEMENT AMONG THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF SUCH
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG SUCH PARTIES.
VI.6 Governing Law. THIS AMENDMENT AND ALL ISSUES ARISING
IN CONNECTION HEREWITH AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS
WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
VI.7 Jurisdiction and Venue. ALL ACTIONS OR PROCEEDINGS
WITH RESPECT TO, ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH, OUT OF,
RELATED TO OR FROM THIS AMENDMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN
DOCUMENT MAY BE LITIGATED, AT THE SOLE DISCRETION AND ELECTION OF THE LENDER,
IN COURTS HAVING SITUS IN HOUSTON, HARRIS COUNTY, TEXAS. EACH OF THE BORROWERS
HEREBY SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT
LOCATED IN HOUSTON, HARRIS COUNTY, TEXAS, AND HEREBY WAIVES ANY RIGHTS IT MAY
HAVE TO TRANSFER OR CHANGE THE JURISDICTION OR VENUE OF ANY LITIGATION BROUGHT
AGAINST IT BY THE LENDER IN ACCORDANCE WITH THIS SECTION.
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VI.8 Waiver of Rights to Jury Trial. THE BORROWER, EACH OF THE
CO-BORROWERS AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY,
IRREVOCABLY, AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT RELATES TO OR
ARISES OUT OF THIS AMENDMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN DOCUMENT
OR THE ACTS OR OMISSIONS OF THE LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS
OR PROVISIONS OF THIS AMENDMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN
DOCUMENT OR OTHERWISE WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION ARE
A MATERIAL INDUCEMENT FOR THE LENDER ENTERING INTO THIS AMENDMENT.
IN WITNESS WHEREOF, this Amendment is executed effective as of
the date first hereinabove written.
SOUTHERN MINERAL CORPORATION
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY,
INC.
BEC ENERGY, INC.
By:
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James H. Price
Vice President-Finance
COMPASS BANK
By:
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Allison Hammer
Vice President
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