EXHIBIT 10.39
[Logo] Compass Bank Compass Bank
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
September 2, 1999
Xx. Xxxxxx X. Xxxxx
President & CEO
Southern Mineral Corporation
0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
RE: Amended and Restated Credit Agreement dated June 19, 1998, by and
between Southern Mineral Corporation, SMC Ecuador, Inc., SMC
Production Co., BEC Energy, Inc., Amerac Energy Corporation, Compass
Bank and First Union National Bank (as subsequently amended, restated,
and/or supplemented, the "Credit Agreement")
Dear Xxxxx:
Section 2.5 (a) of the Credit Agreement shall be amended to change the date of
September 1, 1999, to September 30, 1999.
The above date extension is contingent upon the payment of a fee ("Extension
Fee") to the Lenders in the amount of $50,000, to be shared pro rata by the
Lenders.
In connection with the proceeds from the sale of the Borrower's interest in the
Texan Gardens field, the Lenders agree to waive the requirements of Section 5.23
of the Credit Agreement, thereby allowing the Borrower to retain the remainder
of the proceeds ("Remaining Proceeds") from the sale of its interests in the
Texan Gardens field after payment of the following:
(i) Payment to the Lenders of the Restructure Fee as provided in Section 2.26
of the Credit Agreement. Section 2.26 of the Credit Agreement is hereby
amended to provide that such Restructure Fee is payable upon the
Borrower's sale of its interests in the Texan Gardens field.
(ii) Payment shall be made to the Lenders of the Extension Fee as provided
herein.
The allowance to retain the Remaining Proceeds is further contingent upon the
Borrower providing to the Agent original checks written on the Borrower's
account, payable to vendors and other parties, including amounts due associated
with the sale of the Texan Gardens field (along with stamped addressed
envelopes) which are to be paid out of the Remaining Proceeds in an amount
totaling no less than the Remaining Proceeds. Such checks will be mailed by the
Agent upon deposit of the Remaining Proceeds into Borrower's account.
Xx. Xxxxxx X. Xxxxx
September 2, 1999
Page 2
Except as expressly provided herein, the Credit Agreement and the other Loan
Documents shall remain in full force and effect in accordance with their
respective terms and this letter shall not be construed to:
(i) impair the validity, perfection or priority of any lien or security
interest securing the Obligations;
(ii) waive or impair any rights, powers or remedies of the Agent and the
Lenders under the Credit Agreement and the other Loan Documents; or
(iii) grant any forbearance periods or extend the term of the Credit
Agreement or the time for payment of any of the Obligations, except as
expressly provided herein.
No Event of Default and no Default is waived or remedied by the execution of
this letter by the Lenders, and any such Default or Event of Default heretofore
arising and currently continuing shall continue after the execution and delivery
hereof. Nothing contained in this letter, nor any past indulgence by the
Lenders, nor any prior waiver or consents or any waivers or consents which may
hereafter be granted nor any other action or inaction on behalf of the Lenders
(i) shall constitute or be deemed to constitute a waiver of any Defaults or
Events of Default which exist or may exist under the Credit Agreement or any
other Loan Document, or (ii) shall constitute or be deemed to constitute an
election of remedies by the Lenders or a waiver of any of the rights or remedies
of the Lenders provided in the Credit Agreement or the other Loan Documents or
otherwise afforded at law or in equity.
THIS LETTER, THE AGREEMENT AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT,
COLLECTIVELY, THE FINAL AGREEMENT BETWEEN THE PARTIES 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.
Sincerely,
COMPASS BANK
By: /s/ Xxxxxxx Xxxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxxxx Xxxxxx
Senior Vice President
FIRST UNION NATIONAL BANK
By: Illegible Signature
-------------------------------
Its:Senior Vice President
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Xx. Xxxxxx X. Xxxxx
September 2, 1999
Page 3
ACKNOWLEDGED AND AGREED:
SOUTHERN MINERAL CORPORATION
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
