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EXHIBIT 10.15
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and
entered into effective as of the 10th 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").
WITNESSETH:
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, and by
letter amendment dated August 30, 1996, and by letter amendment dated January
22, 1997, and by Second Amendment to Credit Agreement effective as of December
17, 1996 (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
1.1 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.
1.2 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.
1.3 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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1.4 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.
1.5 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
2.1 Amendment of Section 1.2. The following definitions are hereby added
and/or amended to read as follows:
"Commitment Termination Date" shall mean June 1, 2000.
"Final Maturity" shall mean June 1, 2000.
"L/C Exposure" shall mean, at any time, the aggregate maximum amount
available to be drawn under outstanding Letters of Credit at such time.
"Letter of Credit" shall mean any standby letter of credit issued by
the Lender for the account of the Borrower pursuant to Section 2.23.
"Letter of Credit Application" shall mean the standard letter of
credit application employed by the Lender from time to time in connection
with letters of credit.
"Letter of Credit Fee" shall mean each fee payable to the Lender by
the Borrower pursuant to Section 2.25 upon or in connection with the
issuance of a Letter of Credit.
"Loan" shall mean any loan made by the Lender to or for the benefit of
the Borrower pursuant to this Agreement and any payment made by the Lender
under a Letter of Credit.
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"Loan Documents" shall mean this Agreement, the Note, the Letter of
Credit Applications, the Letters of Credit, the Security Instruments, and
all other documents and instruments now or hereafter delivered pursuant to
the terms of or in connection with this Agreement, the Note, the Letter of
Credit Applications, the Letters of Credit, or the Security Instruments,
and all renewals and extensions of, or amendments and supplements to, and
restatements of, any or all of the foregoing from time to time in effect.
"Obligations" shall mean, without duplication, (a) all Indebtedness
evidenced by the Note, (b) the undrawn, unexpired amount of all outstanding
Letters of Credit, (c) the obligation of the Borrower for the payment of
Commitment Fees, Facility Fees, Letter of Credit Fees, and Engineering
Fees, and (e) all other obligations and liabilities of the Borrower to the
Lender, now existing or hereafter incurred, under, arising out of or in
connection with any Loan Document, and to the extent that any of the
foregoing includes or refers to the payment of amounts deemed or
constituting interest, only so much thereof as shall have accrued, been
earned and which remains unpaid at each relevant time of determination.
2.2 Deletion of Section 2.2. Section 2.2 of the Credit Agreement shall be
deleted.
2.3 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 10, 1997, is acknowledged by the Borrower, the Co-Borrowers and the
Lender to be $19,200,000. Commencing on July 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."
2.4 Amendment of Section 2.8. Section 2.8 of the Credit Agreement is
hereby amended to read as follows:
"2.8 Mandatory Prepayments. If at any time the sum of the Loan
Balance and the L/C Exposure exceeds the Borrowing Base then in effect, the
Borrower and/or the Co-Borrower shall, within 30 days of notice from the
Lender of such occurrence, (a) prepay, or make arrangements acceptable to
the Lender for the prepayment of, the amount of such excess for application
on the Loan Balance, (b) provide additional collateral, of character and
value satisfactory to the Lender in its sole discretion, to secure the
amount of such excess by the execution and delivery to the Lender, or (c)
effect any combination of the alternatives described in clauses (a) and (b)
of this Section and acceptable to the Lender in its sole discretion. In the
event that a mandatory prepayment
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is required under this Section and the Loan Balance is less than the
amount required to be prepaid, the Borrower shall repay the entire Loan
Balance and, in accordance with the provisions of the relevant Letter of
Credit Applications executed by the Borrower or otherwise to the
satisfaction of the Lender, deposit with the Lender, as additional
collateral securing the Obligations, an amount of cash, in immediately
available funds, equal to the L/C Exposure minus the lesser of the
Commitment Amount or the Borrowing Base. The cash deposited with the
Lender in satisfaction of the requirement provided in this Section may
be invested, at the sole discretion of the Lender and then only at the
express direction of the Borrower as to investment vehicle and maturity
(which shall be no later than the latest expiry date of any then
outstanding Letter of Credit), for the account of the Borrower in cash
or cash equivalent investments offered by or through the Lender."
2.5 Addition of Section 2.23. Section 2.23 shall be added to the
Credit Agreement to read as follows:
"2.23 Letter of Credit Facility. (a) Upon the terms and conditions
(including, without limitation, the right of the Lender to decline to
issue any Letter of Credit so long as any Default or Event of Default
exists) and relying on the representations and warranties contained in
this Agreement, the Lender agrees, during the Commitment Period, to
issued Letters of Credit following the receipt not less than three
Business Days prior to the requested date for issuance of the relevant
Letter of Credit, of a Letter of Credit Application executed by the
Borrower; provided, however, (a) no Letter of Credit shall have an
expiration date which is more than one year after the issuance thereof
or subsequent to the Commitment Termination Date, and (b) the Lender
shall not be obligated to issue any Letter of Credit if (i) the face
amount thereof would exceed the Available Commitment, or (ii) after
giving effect to the issuance thereof, (A) the L/C Exposure, when added
to the Loan Balance then outstanding, would exceed the lesser of the
Commitment Amount or the Borrowing Base then in effect, or (B) the L/C
Exposure would exceed $5,000,000.
(b) Should the Lender be called upon by the beneficiary of any Letter
of Credit to honor all or any portion of the commitment thereunder,
whether upon the presentation of drafts or otherwise, such payment by
the Lender on account of such Letter of Credit shall be treated, for all
purposes, as a Floating Rate Loan and an advance against the Note."
2.6 Addition of Section 2.24. Section 2.24 shall be added to the
Credit Agreement to read as follows:
"2.24 Use of Loan Proceeds and Letters of Credit. (a) Proceeds of
all Loans shall be used solely for general corporate purposes of the
Borrower and Co-Borrowers."
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(b) Letters of Credit shall be used solely for general corporate
purposes of the Borrower; provided, however, no Letter of Credit may be
used in lieu or in support of stay or appeal bonds."
2.7 Addition of Section 2.25. Section 2.25 shall be added to the Credit
Agreement to read as follows:
"2.25 Letter of Credit Fee. In addition to interest on the Note as
provided herein and Commitment Fees and Facility Fees payable hereunder,
the borrower agrees to pay to the Lender, on the date of issuance of each
Letter of credit, a fee equal to one percent (1%) per annum, calculated on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day), on the fact
amount of such Letter of Credit during the period for which such Letter of
Credit is issued; provided, however, in the event such Letter of Credit is
canceled prior to its original expiry date or a payment is made by the
Letter of Credit is canceled prior to its original expiry date or a payment
is made by the Lender with respect to such Letter of Credit, the Lender
shall, within 30 days after such cancellation or the making of such
payment, rebate to the Borrower the unearned portion of such fee. The
Borrower also agrees to pay to the Lender on demand its customary letter of
credit transactional fees, including, without limitation, amendment fees,
payable with respect to each Letter of Credit."
2.8 Amendment of Section 3.2. Section 3.2 of the Credit Agreement shall
be amended to read as follows:
"3.2 Each Loan and Letter of Credit. In addition to the conditions
precedent stated elsewhere herein, the Lender shall not be obligated to
make any Loan or issue any Letter of Credit unless:
(a) the Borrower and/or the Co-Borrowers shall have delivered to the
Lender a Borrowing Request at least the requisite time prior to the
requested date for the relevant Loan, or a Letter of Credit Application at
least three Business days prior to the requested issuance date for the
relevant Letter of Credit; and each statement or certification made in such
Borrowing Request or Letter of Credit Application, as the case may be,
shall be true and correct in all material respects on the requested date
for such Loan or issuance of such Letter of Credit;
(b) no Event of Default or Default shall exist or will occur as a
result of the making of the requested Loan or the issuance of the requested
Letter of Credit;
(c) if requested by the Lender, the Borrower and/or the Co-Borrowers
shall have delivered evidence satisfactory to the Lender substantiating any
of the matters contained in this Agreement which are necessary to enable
the Borrower and/or the Co-Borrowers to qualify for such Loan or the
issuance of such Letter of Credit;
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(d) the Lender shall have received, reviewed, and approved such
additional documents and items as described in Section 3.1 as may be
requested by the Lender with respect to such Loan or Letter of Credit;
(e) no event shall have occurred which, in the reasonable opinion of
the Lender, could have a Material Adverse Effect;
(f) each of the representations and warrants contained in this
Agreement shall be true and correct and shall be deemed to be repeated by
the Borrower and/or the Co-Borrowers as if made on the requested date for
such Loan or the issuance of such Letter of Credit;
(g) the Security Instruments shall be in full force and effect and
provide to the Lender the security intended thereby;
(h) neither the consummation of the transactions contemplated hereby
nor the making of such Loan or the issuance of such Letter of Credit shall
contravene, violate, or conflict with any Requirement of Law;
(i) the Borrower, Co-Borrowers and Diverse shall hold full legal title
to the Collateral pledged by such entity and be the sole beneficial owner
thereof;
(j) the Lender shall have received the payment of all Engineering
Fees, Facility Fees, Letter of Credit Fees, and other fees payable to the
Lender hereunder and reimbursement from the Borrower and/or the
Co-Borrowers, or special legal counsel for the Lender shall have received
payment from the Borrower and/or the Co-Borrowers, for (i) all reasonable
fees and expenses of counsel to the Lender for which the Borrower and/or
the Co-Borrowers is responsible pursuant to applicable provisions of this
Agreement and for which invoices have been presented as of or prior to the
date of the relevant Loan or Letter of Credit Application, and (ii)
estimated fees charged by filing officers and other public officials
incurred or to be incurred in connection with the filing and recordation of
any Security Instruments, for which invoices been presented as of or prior
to the date of the requested Loan or Letter of Credit Application; and
(k) all matters incident to the consummation of the transactions
hereby contemplated shall be satisfactory to the Lender."
2.9 Amendment of Section 5.20. Section 5.20 of the Credit Agreement
shall be amended to read as follows:
"5.20 INDEMNIFICATION. INDEMNIFICATION AND HOLD THE LENDER AND ITS
SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT,
AND AFFILIATES AND EACH TRUSTEE FOR THE
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BENEFIT OF THE LENDER UNDER ANY SECURITY INSTRUMENT HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, LOSSES, DAMAGES, LIABILITIES, FINES, PENALTIES, CHARGES,
ADMINISTRATIVE AND JUDICIAL PROCEEDINGS AND ORDERS, JUDGMENTS, REMEDIAL
ACTIONS, REQUIREMENTS AND ENFORCEMENT ACTIONS OF ANY KIND, AND ALL COSTS AND
EXPENSES INCURRED IN CONNECTION THEREWITH (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES AND EXPENSES), ARISING DIRECTLY OR INDIRECTLY, IN WHOLE OR IN
PART, FROM (A) THE PRESENCE OF ANY HAZARDOUS SUBSTANCES ON, UNDER, OR FROM ANY
PROPERTY OF THE BORROWER AND/OR THE CO-BORROWERS OR DIVERSE. WHETHER PRIOR TO
OR DURING THE TERM HEREOF, (B) ANY ACTIVITY CARRIED ON OR UNDERTAKEN ON OR OFF
ANY PROPERTY OF THE BORROWER AND/OR THE CO-BORROWERS OR DIVERSE, WHETHER PRIOR
TO OR DURING THE TERM HEREOF, AND WHETHER BY THE BORROWER AND/OR THE
CO-BORROWERS OR DIVERSE OR ANY PREDECESSOR IN TITLE, EMPLOYEE, AGENT,
CONTRACTOR, OR SUBCONTRACTOR OF THE BORROWER AND/OR THE CO-BORROWERS OR DIVERSE
OR ANY OTHER PERSON AT ANY TIME OCCUPYING OR PRESENT ON SUCH PROPERTY, IN
CONNECTION WITH THE HANDLING, TREATMENT, REMOVAL, STORAGE, DECONTAMINATION,
CLEANUP, TRANSPORTATION, OR DISPOSAL OF ANY HAZARDOUS SUBSTANCES AT ANY TIME
LOCATED OR PRESENT ON OR UNDER SUCH PROPERTY, (C) ANY RESIDUAL CONTAMINATION ON
OR UNDER ANY PROPERTY OF THE BORROWER AND/OR THE CO-BORROWERS OR DIVERSE, (D)
ANY CONTAMINATION OF ANY PROPERTY OR NATURAL RESOURCES ARISING IN CONNECTION
WITH THE GENERATION, USE, HANDLING, STORAGE, TRANSPORTATION OR DISPOSAL OF ANY
HAZARDOUS SUBSTANCES BY THE BORROWER AND/OR THE CO-BORROWERS OR DIVERSE OR ANY
EMPLOYEE, AGENT, CONTRACTOR, OR SUBCONTRACTOR OF THE BORROWER AND/OR THE
CO-BORROWERS OR DIVERSE WHILE SUCH PERSONS ARE ACTING WITHIN THE SCOPE OF THEIR
RELATIONSHIP WITH THE BORROWER AND/OR THE CO-BORROWERS OR DIVERSE, IRRESPECTIVE
OF WHETHER ANY OF SUCH ACTIVITIES WERE OR WILL BE UNDERTAKEN IN ACCORDANCE WITH
APPLICABLE REQUIREMENTS OF LAW, OR (E) THE PERFORMANCE OF ANY LOAN DOCUMENT,
ANY ALLEGATION BY ANY BENEFICIARY OF A LETTER OF CREDIT OF A WRONGFUL DISHONOR
BY THE LENDER OF A CLAIM OR DRAFT PRESENTED THEREUNDER, OR ANY OTHER ACT OR
OMISSION IN CONNECTION WITH OR RELATED TO ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING, WITHOUT LIMITATION, ANY OF THE
FOREGOING IN THIS SECTION ARISING FROM NEGLIGENCE, OTHER THAN GROSS NEGLIGENCE,
WHETHER SOLE OR CONCURRENT, ON THE PART OF THE LENDER OR ANY OF ITS
SHAREHOLDERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT, OR
AFFILIATES OR ANY TRUSTEE FOR THE BENEFIT OF THE LENDER UNDER ANY SECURITY
INSTRUMENT; WITH THE
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FOREGOING INDEMNITY SURVIVING SATISFACTION OF ALL OBLIGATIONS AND THE
TERMINATION OF THIS AGREEMENT, UNLESS ALL SUCH OBLIGATIONS HAVE BEEN
SATISFIED WHOLLY IN CASH FROM THE BORROWER AND NOT BY WAY OF REALIZATION
AGAINST ANY COLLATERAL OR THE CONVEYANCE OF ANY PROPERTY IN LIEU
THEREOF, PROVIDED THAT SUCH INDEMNITY SHALL NOT EXTEND TO ANY ACT OR
OMISSION BY THE LENDER WITH RESPECT TO ANY PROPERTY SUBSEQUENT TO THE
LENDER BECOMING THE OWNER OF SUCH PROPERTY AND WITH RESPECT TO WHICH
PROPERTY SUCH CLAIM, LOSS, DAMAGE, LIABILITY, FINE, PENALTY, CHARGE,
PROCEEDING, ORDER, JUDGMENT, ACTION, OR REQUIREMENT ARISES SUBSEQUENT TO
THE ACQUISITION OF TITLE THERETO BY THE LENDER."
2.10 Amendment of Section 7.1(e). Section 7.1(e) of the Credit
Agreement shall be amended to read as follows:
"7.1(e) the Borrower and/or the Co-Borrowers shall be unable to
satisfy any condition or cure any circumstance specified in Article III,
the satisfaction or curing of which is precedent to the right of the
Borrower and/or the Co-Borrowers to obtain a Loan or the issuance of a
Letter of Credit, and such inability shall continue for a period in
excess of 30 days;"
2.11 Amendment of Section 8.7. Section 8.7 of the Credit Agreement
shall be amended to read as follows:
"8.7 No Waiver; Rights Cumulative. No course of dealing on the
part of the Lender, its officers or employees, nor any failure or delay
by the Lender with respect to exercising any of its rights under any
Loan Document shall operate as a waiver thereof. The rights of the
Lender under the Loan Documents shall be cumulative and the exercise or
partial exercise of any such right shall not preclude the exercise of
any other right. Neither the making of any Loan nor the issuance of a
Letter of Credit shall constitute a waiver of any of the covenants,
warranties, or conditions of the Borrower and the Co-Borrowers contained
herein. In the event the Borrower and the Co-Borrowers are unable to
satisfy any such covenant, warranty, or condition, neither the making of
any Loan nor the issuance of a Letter of Credit shall have the effect of
precluding the Lender from thereafter declaring such inability to be an
Event of Default as hereinabove provided."
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ARTICLE III
CONDITIONS
The obligations of the Lender to amend the Credit Agreement as provided
herein is subject to the fulfillment of the following conditions precedent:
3.1 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 the Amendment executed by the Borrowers,
as requested by the Lender;
(b) Security Agreement (Stock Pledge) of stock of BEC Energy, Inc.;
(c) Mortgage, Deed of Trust, Security Agreement, Financing Statement
and Assignment of Production from BEC Energy, Inc.;
(d) payment of the legal fees and expenses of counsel to the Lender
in connection with this Amendment and the transactions contemplated hereby;
and
(e) such other agreements, documents, items, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may reasonably
request.
3.2 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.
3.3 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.
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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
6.1 Scope of Amendment. The scope of this Amendment is expressly
limited 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.
6.2 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.
6.3 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.
6.4 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.
6.5 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 AGREEMENT AMONG SUCH PARTIES.
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6.6 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 STATE OF TEXAS WITHOUT GIVING
EFFECT TO PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW.
6.7 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, XXXXXX COUNTY, TEXAS. EACH OF THE BORROWERS HEREBY
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE, OR FEDERAL COURT LOCATED
HOUSTON, XXXXXX 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.
6.8 Waiver of Rights to Jury Trial. THE BORROWER, EACH OF THE
CO-BORROWERS AND THE LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY,
IRREVOCABLY, AND UNCONDITIONAL WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, COUNTERCLAIM, OR OTHER LITIGATION THAT 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 TO ANY OF THE
TERMS OR PROVISIONS OF THIS AMENDMENT, THE CREDIT AGREEMENT, OR ANY OTHER LOAN
DOCUMENT OR OTHER WISE 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: XXXXX X. XXXXX
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Xxxxx X. Xxxxx
Vice President-Finance
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COMPASS BANK
By: XXXXXXX XXXXXX
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Xxxxxxx Xxxxxx
Vice President
