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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 28, 1998
SOUTHERN MINERAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
NEVADA 0-8043 36-2068676
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
500 Dallas, Suite 2800
Houston, Texas 77002-4708
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (713) 658-9444
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Southern Mineral Corporation, a Nevada corporation ("SMC"), SMC
Acquisition Corp., a Delaware corporation and wholly owned subsidiary of SMC
("Sub"), and Amerac Energy Corporation, a Delaware corporation ("Amerac"),
entered into the Amended and Restated Agreement and Plan of Merger dated as of
November 17, 1997 (the "Merger Agreement"), pursuant to which Sub was to merge
with and into Amerac with Amerac as the surviving corporation and wholly owned
subsidiary of SMC (the "Merger"). The Merger was consummated and became
effective as of January 28, 1998.
Pursuant to the Merger Agreement, all of the issued and outstanding
shares of Amerac common stock, par value $0.05, per share immediately prior to
the Merger (the "Amerac Common Stock") were converted into the right to receive
consideration of approximately $15 million paid to the holders of Amerac Common
Stock in the form of common stock, par value $0.01, per share, of SMC ("SMC
Common Stock"). The Merger Agreement provided that such an exchange of Amerac
Common Stock for SMC Common Stock would be made pursuant to an Exchange Ratio
(as defined in the Merger Agreement) of .8509th of a share of SMC Common Stock
for each share of Amerac Common Stock, with cash being issued in lieu of
fractional shares.
This summary is qualified in its entirety by the Company's January 28,
1998 press release concerning the above mentioned acquisition attached hereto as
an exhibit and incorporated herein by reference.
ITEM 5. OTHER EVENTS
On January 28, 1998, the stockholders of SMC approved the Restated
Articles of Incorporation of SMC which increase the number of authorized shares
of SMC Common Stock from 20 million shares to 50 million shares and authorized
the issuance of up to five million shares of "blank check" preferred stock.
On December 31, 1997 and January 28, 1998, SMC executed the Fifth
Amendment to Credit Agreement and the Sixth Amendment to Credit Agreement,
respectively, to that certain Credit Agreement, dated December 20, 1995,
executed in connection with a loan extended to SMC by Compass Bank.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Acquired Business.
The financial statements of Amerac for the periods specified in Rule
3-05(b) of regulation S-X are incorporated herein by reference to
Appendix F and Appendix G, respectively, of Amendment No. 1 to the
Registration Statement on Form S-4 of SMC (Registration No. 333-42045).
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(b) Pro Forma Financial Information.
The pro forma financial statements required pursuant to Article 11 of
Regulation S-X is incorporated herein by reference to pages 49 through
52 of Amendment No. 1 to the Registration Statement on Form S-4 of SMC
(Registration No. 333-42045).
(c) Exhibits.
2.1 Amended and Restated Agreement and Plan of Merger between SMC, SMC
Acquisition Corp., and Amerac, dated as of November 17, 1997
(incorporated by reference to Appendix A to Amendment No. 1 to SMC's
Registration Statement on Form S-4 (Commission File No. 333-42045)).
*3.1 Restated Articles of Incorporation of the Registrant.
*10.1 Fifth Amendment to Credit Agreement between the Registrant and
Compass Bank, dated December 31, 1997.
*10.2 Sixth Amendment to Credit Agreement between the Registrant and
Compass Bank, dated January 28, 1998.
20.1 Financial Information, including Pro Forma financial information and
Historical Financial Data of each of SMC and Amerac (incorporated by
reference to pp. 49 through 52 of SMC's Registration Statement on Form
S-4 (Registration No. 333-42045)).
*23.1 Consent of Price Waterhouse LLP
*99.1 Press Release, dated January 28, 1998, announcing the merger of
Amerac Energy Corporation into a wholly owned subsidiary of Southern
Mineral Corporation.
*filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SOUTHERN MINERAL CORPORATION
Date: January 28, 1998 By: /S/ JAMES H. PRICE
-------------------------
James H. Price
Vice President-Finance
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBITS.
<S> <C>
2.1 Amended and Restated Agreement and Plan of Merger between SMC, SMC
Acquisition Corp., and Amerac, dated as of November 17, 1997
(incorporated by reference to Appendix A to Amendment No. 1 to SMC's
Registration Statement on Form S-4 (Commission File No. 333-42045)).
*3.1 Restated Articles of Incorporation of the Registrant.
*10.1 Fifth Amendment to Credit Agreement between the Registrant and
Compass Bank, dated December 31, 1997.
*10.2 Sixth Amendment to Credit Agreement between the Registrant and
Compass Bank, dated January 28, 1998.
20.1 Financial Information, including Pro Forma financial information and
Historical Financial Data of each of SMC and Amerac (incorporated by
reference to pp. 49 through 52 of SMC's Registration Statement on Form
S-4 (Registration No. 333-42045)).
*23.1 Consent of Price Waterhouse LLP
*99.1 Press Release, dated January 28, 1998, announcing the merger of
Amerac Energy Corporation into a wholly owned subsidiary of Southern
Mineral Corporation.
</TABLE>
*filed herewith
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EXHIBIT 3.1
RESTATED ARTICLES OF INCORPORATION
OF
SOUTHERN MINERAL CORPORATION
Steven H. Mikel and Margie C. Ewald each certifies:
1. That Steven H. Mikel is the President and Chief Executive Officer and
Margie C. Ewald is the Secretary, respectively, of Southern Mineral
Corporation, a Nevada corporation (the "COMPANY").
2. That the Board of Directors (the "BOARD") of the Company, by unanimous
written consent dated November 17, 1997, resolved to restate the articles
of incorporation of the Company, pursuant to Section 78.403 of the Nevada
General Corporation Law (the "NGCL").
3. That a majority of the stockholders of the Company, at meeting duly called
and held on January 28, 1998, resolved to restate the articles of
incorporation of the Company, pursuant to Section 78.403 of the NGCL as
follows:
"NOW THEREFORE, BE IT RESOLVED, that the articles of
incorporation of the Company be restated to increase the number of
authorized shares of common stock, par value $.01 per share, from
20,000,000 shares to 50,000,000 shares and authorize the issuance of
up to 5,000,000 shares of 'blank check' preferred stock."
4. That as a result of the adoption of such resolutions, the articles of
incorporation of the Company, as amended to date, have been restated to
read in their entirety as follows:
ARTICLE I
NAME
The name of the Company is: Southern Mineral Corporation
ARTICLE II
DEFINITIONS
In addition to the above-defined terms, the following terms have the
meanings given for purposes of these restated articles of incorporation:
"ANNOUNCEMENT DATE" shall have the meaning set forth in Section
(b)(iii)(B)(1) of Article VII.
"ARTICLES" means these restated articles of incorporation.
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"BUSINESS COMBINATION" means: (a) any merger, reorganization or
consolidation of the Company or any of its subsidiaries with or into a Related
Person, (b) any sale, lease, exchange, transfer or other disposition of all or
substantially all of the property and assets of the Company or any of its
subsidiaries (including the issuance of any voting securities) to a Related
Person, (c) any merger or consolidation of a Related Person with or into the
Company or any of its subsidiaries, (d) any sale, lease, exchange, transfer or
other disposition of all or any substantial part of the assets of the Related
Person (including the issuance of any securities of the Related Person) to the
Company or any of its subsidiaries, or (e) any liquidation or dissolution of the
Company of any of its subsidiaries.
"BYLAWS" shall have the meaning set forth in Article III.
"CHANGE" shall have the meaning set forth in Section (a) of Article X.
"COMMON STOCK" shall have the meaning set forth in Article V.
"CONTINUING DIRECTOR" means a director (a) who was a member of the Board of
the Company immediately prior to the time that a Related Person involved in a
Business Combination (as those terms are defined in these Articles) became the
owner of more than 20% of the outstanding shares of capital stock of the Company
entitled to vote on the election of directors or (b) who was elected, appointed
or nominated as a director by a majority of the Continuing Directors.
"DETERMINATION DATE" shall have the meaning set forth in Section
(b)(iii)(B)(1) of Article VII.
"LIQUIDATION" means any voluntary or involuntary liquidation, dissolution
or winding-up of the Company.
"PERSON" means any natural person, partnership (general or limited),
corporation, group or other entity (other than the Company, any subsidiary of
the Company or a trustee holding stock for the benefit of employees of the
Company or its subsidiaries, or any one of them, pursuant to one or more
employee benefit plans or arrangement). When two or more Persons act as a
partnership (general or limited), syndicate, association or other group for the
purpose of acquiring, holding or disposing of shares of stock, such partnership
(general or limited), syndicate, association or group shall be deemed a Person.
"PREFERRED STOCK" shall have the meaning set forth in Article V.
"RELATED PERSON" means any Person which is the beneficial owner (as such
term is defined in Rule 13d-3 of the General Rules and Regulations under the
Securities Exchange Act of 1934) as of the Determination Date or immediately
prior to the consummation of a Business Combination, of 20% or more of the
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capital stock of the Company entitled to vote on the election of directors, and
any "affiliate" or "associate" (as such terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934) of any
such Person.
"STOCKHOLDER MEETING" shall have the meaning set forth in Section (a) of
Article IX.
"VOTING STOCK" means (a) Common Stock and (b) Preferred Stock granted
voting rights pursuant to Article V, paragraph (b)(ii).
ARTICLE III
RESIDENT OFFICE
The resident office of the Company is located at One East First Street,
Reno, Nevada 89501 and the name of the initial registered agent at such address
is The Corporation Trust Company of Nevada. The Company may maintain an office
or offices in such towns, cities and places within or outside of the State of
Nevada as the Board may from time to time determine or as may be designated by
the By-Laws of the Company (the "BYLAWS").
ARTICLE IV
PURPOSE
The nature of the business, or object, or purposes, proposed to be
transacted, promoted or carried on by the Company are as follows: To engage in
any lawful activity.
The enumeration of the foregoing powers shall not in anyway be deemed to be
a limitation upon the powers of the Company, but shall be in furtherance of and
in addition to the powers which it is authorized to exercise under "An Act to
Provide a General Corporation Law," approved March 21, 1925, and acts amendatory
and supplemental thereto.
ARTICLE V
CAPITALIZATION
The total number of shares of all classes of stock that the Company shall
have authority to issue is 55,000,000 shares, consisting of 50,000,000 shares of
Common Stock, par value $.01 per share (the "Common Stock"), and 5,000,000
shares of Preferred Stock, par value $.01 per share (the "Preferred Stock").
(a) TERMS OF COMMON STOCK.
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(i) GENERAL. Except as otherwise required by law or as otherwise
provided in these Articles, each share of Common Stock shall have identical
powers, preferences, qualifications, limitations and other rights.
(ii) VOTING RIGHTS. Except as otherwise required by law or as
otherwise provided in these Articles each share of Common Stock shall be
entitled to one vote per share.
(iii) DIVIDENDS. Subject to the rights of any outstanding class or
series of capital stock ranking senior to Common Stock as to dividends,
dividends may be paid upon Common Stock in cash, property or securities as
and when declared by the Board out of funds legally available therefor. As
and when dividends are so declared and paid, the holders of Common Stock
shall be entitled to participate in such dividends ratably on a per share
basis.
(iv) LIQUIDATION. Upon any Liquidation, the holders of Common Stock
are entitled to share ratably in the net assets, if any, remaining after
payment in full of all debts and liabilities of the Company and after the
holders of any outstanding class or series of capital stock ranking senior
to Common Stock shall have been paid in full the amounts to which such
holders shall be entitled, or an amount sufficient to pay the aggregate
amount to which such holders are entitled shall have been set aside for the
benefit of the holders of such senior stock.
(v) NO PREEMPTIVE RIGHTS. The Board may from time to time issue any
class or series of authorized stock of the Company, or any notes,
debentures, bonds, or other securities convertible into or carrying options
or warrants to purchase authorized stock of any class or series without
offering any such stock, either in whole or in part, to the existing
stockholders. No stockholder of the Company shall because of his holding
shares have any preemptive or preferential rights to purchase or subscribe
to stock of any class or series of the Company now or hereafter to be
authorized, or any notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase stock of any
class or series now or hereafter to be authorized, whether or not the
issuance of any such stock, or such notes, debentures, bonds or other
securities, would adversely affect the dividend or voting rights of such
stockholder; provided, however, all such newly authorized shares of stock
of any class or series, or notes, debentures, bonds or other securities
convertible into, or carrying options or warrants to purchase, stock of any
class or series, may be issued and disposed of or sold by the Board on such
terms and for such consideration, so far as may be permitted by law, and to
such person or persons as the Board may determine in its discretion from
time to time.
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(b) PREFERRED STOCK. The Preferred Stock may be issued from time to time in
one or more series, each of such series to have such voting powers, designation,
preferences, and relative participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, as are stated and
expressed herein or in a resolution or resolutions providing for the issuance of
such series, adopted by the Board as hereinafter provided. The Board is hereby
expressly empowered, subject to this Article V, to provide for the issuance of
the Preferred Stock from time to time in series and to fix by resolution or
resolutions providing for the issuance of such series:
(vi) NUMBER. The number of shares to constitute such series and the
designation thereof.
(vii) VOTING RIGHTS. The voting rights, full or limited, if any, to
which holders of shares of any series of Preferred Stock may be entitled.
(viii) DIVIDENDS. The dividend rate of the shares of such series, and
whether such dividends shall be cumulative.
(ix) REDEMPTION PROVISIONS. Whether the shares of such series shall be
redeemable and, if redeemable, the redemption price and the terms and
conditions thereof.
(x) LIQUIDATION PREFERENCE. The amount, if any, which the shares of
any such series shall be entitled to receive, before any distribution or
payment shall be made to holders of the Common Stock, upon a Liquidation,
or of any proceedings resulting in any distribution of all, or
substantially all, of its assets to its stockholders; provided, however,
the sale of all, or substantially all, of the property and assets of the
Company to, or the merger or consolidation of the Company into or with, any
other corporation shall not be deemed to be a Liquidation within the
meaning of this Section (b)(v) of Article V.
(xi) SINKING FUNDS. Whether the shares of such series shall be subject
to the operation of retirement or sinking funds to be applied to the
purchase or redemption of such shares and, if such funds are established,
the annual amount thereof, and the terms and provisions relative to the
operation thereof.
(xii) CONVERSION RIGHTS. Whether the shares of such series shall be
convertible into, or exchangeable for, shares of any other class or classes
of any other series of the same or any other class of stock of the Company
and, if convertible, the conversion price or prices or rate or rates of
conversion or exchange and the terms of adjustments, if any, upon such
conditions as shall be stated in said resolution or resolutions.
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(xiii) OTHER RIGHTS. Such other designations, preferences and relative
participating, optional or other special rights and qualifications,
limitations or restrictions thereof as it may deem advisable and shall be
stated in said resolution or resolutions.
ARTICLE VI
ELECTION OF DIRECTORS
(a) The business and affairs of the Company shall be conducted and managed
by, or under the direction of, the Board. Except as otherwise provided for or
fixed pursuant to Article V relating to the rights of the holders of any series
of Preferred Stock to elect additional directors, the total number of directors
constituting the entire Board shall be fixed from time to time by or pursuant to
a resolution passed by the Board.
(b) The number of directors which shall constitute the whole Board shall be
as specified pursuant to the Bylaws and may be altered from time to time as may
be provided therein. Each director shall serve for a term expiring at the third
annual meeting following the annual meeting at which such director was elected.
The foregoing notwithstanding, except as otherwise provided in these Articles or
any resolution or resolutions of the Board designating a series of Preferred
Stock, directors who are elected at an annual meeting of stockholders, and
directors elected in the interim to fill vacancies and newly created
directorships, shall hold office for the term for which elected and until their
successors are elected and qualified or until their earlier death, resignation
or removal. Whenever the holders of any class or classes of stock or any series
thereof shall be entitled to elect one or more directors pursuant to these
Articles or any resolution or resolutions of the board designating a series of
Preferred Stock, and, except as otherwise provided herein or therein, vacancies
and newly created directorships of such class or classes or series thereof may
be filled by a majority of the directors elected by such class or classes or
series thereof then in office, by a sole remaining director so elected or by the
unanimous written consent or the affirmative vote of a majority of the
outstanding shares of such class or classes or series entitled to elect such
director or directors.
(c) Except as otherwise provided for or fixed pursuant to Article V
relating to the rights of the holders of any series of Preferred Stock to elect
additional directors, and subject to the provisions hereof, newly created
directorships resulting from any increase in the authorized number of directors,
and any vacancies on the Board resulting from death, resignation,
disqualification, removal or other cause, may be filled only by the affirmative
vote of a majority of the remaining directors then in office, even though less
than a quorum of the Board. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
newly created directorship or for the directorship in which the vacancy
occurred, and until such director's successor shall have been duly elected and
qualified, subject to such director's
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earlier death, disqualification, resignation or removal. Subject to the
provisions of these Articles, no decrease in the number of directors
constituting the Board shall shorten the term of any incumbent director.
(d) During any period when the holders of any series of Preferred Stock
have the right to elect additional directors as provided for or fixed pursuant
to Article V, then upon commencement and for the duration of the period during
which such right continues (i) the then otherwise total authorized number of
directors of the Company shall automatically be increased by such specified
number of directors, and the holders of such Preferred Stock shall be entitled
to elect the additional directors so provided for or fixed pursuant to said
provisions, and (ii) each such additional director shall serve until such
director's successor shall have been duly elected and qualified, or until such
director's right to hold such office terminates pursuant to said provisions,
whichever occurs earlier, subject to his earlier death, disqualification,
resignation or removal. Except as otherwise provided by the Board in the
resolution or resolutions establishing such series, whenever the holders of any
series of Preferred Stock having such right to elect additional directors are
divested of such right pursuant to the provisions of such stock, the terms of
office of all such additional directors elected by the holders of such stock, or
elected to fill any vacancies resulting from death, resignation,
disqualification or removal of such additional directors, shall forthwith
terminate and the total and authorized number of directors of the Company shall
be reduced accordingly. Notwithstanding the foregoing, whenever, pursuant to
Article V, the holders of any one or more series of Preferred Stock shall have
the right, voting separately as a series or together with holders of other such
series, to elect directors at an annual or special meeting of stockholders, the
election, term of office, filling of vacancies and other features of such
directorships shall be governed by the terms of these Articles and the
Certificate of Designations applicable thereto, and such directors so elected
shall not be divided into classes pursuant to this Section 6(d) of Article VI,
unless expressly provided by such terms.
(e) Except for such additional directors, if any, as are elected by the
holders of any series of Preferred Stock as provided for or fixed pursuant to
Article V, any director may be removed from office only by the affirmative vote
of the holders of 66 2/3% or more of the combined voting power of the
then-outstanding shares of Voting Stock at a meeting of stockholders called for
that purpose, voting together as a single class.
ARTICLE VII
RESTRICTIONS ON BUSINESS COMBINATIONS
(a) Except as set forth in Section 7(b) of this Article VII, any Business
Combination shall require the affirmative vote of the holders of shares
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representing at least 66 2/3% of the outstanding shares of capital stock of the
Company entitled to vote on the election of directors.
(b) The provisions of Section 7(a) of this Article VII shall not apply
to any Business Combination if:
(i) the Business Combination is approved by majority of the Continuing
Directors;
(ii) the Business Combination is with another corporation, a majority
of the outstanding shares of stock of which is owned of record or
beneficially, directly or indirectly, by the Company or its subsidiaries
and none of which is owned by a Related Person; or
(iii) the form of consideration and minimum price requirements
described below are satisfied:
(A) in a Business Combination, the cash or consideration to be
paid to the Company's stockholders is either cash or the same type of
consideration used by the Related Person in acquiring the largest
portion of its shares of the Company's voting capital stock prior to
the first public announcement of the proposed Business Combination;
and
(B) the fair market value per share of such payments to the
Company's stockholders in a Business Combination is at least equal in
value to the higher of (1) the highest per share price (including
brokerage commissions, soliciting dealers' fees, dealer-manager
compensation and other expenses, and as appropriately adjusted to take
account of stock splits, reverse stock splits, stock dividends and
similar transactions) paid or agreed to be paid by the Related Person
to acquire any shares of the Company's voting capital stock during the
two years prior to the first public announcement of the proposed
Business Combination (the "ANNOUNCEMENT DATE") or in the transaction
in which the Related Person first became a Related Person (the date of
such transaction herein referred to as the "DETERMINATION DATE"),
whichever is higher, or (2) the fair market value per share of the
Common Stock on the Announcement Date or on the Determination Date,
whichever is higher.
ARTICLE VIII
NO WRITTEN CONSENTS OF STOCKHOLDERS
Except as otherwise provided for or fixed pursuant to Article IV relating
to the rights of the holders of any series of Preferred Stock, no action that is
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required or permitted to be taken by the stockholders at any annual or special
meeting of stockholders may be effected by written consent of stockholders in
lieu of a meeting of stockholders, unless the action to be effected by written
consent of stockholders and the taking of such action by such written consent
have expressly been approved in advance by the Board.
ARTICLE IX
STOCKHOLDER MEETINGS
(a) Meetings of stockholders of the Company ("STOCKHOLDER MEETINGS") may be
held within or without the State of Nevada, as the Bylaws may provide. Except as
otherwise provided for or fixed pursuant to Article V relating to the rights of
the holders of any series of Preferred Stock, special Stockholder Meetings may
be called only by (i) the Chairman of the Board or (ii) the Board pursuant to a
resolution adopted by a majority of the seated Continuing Directors of the
Company. Special Stockholder Meetings may not be called by any other Person or
Person or in any other manner. Elections of directors need not be by written
ballot unless the Bylaws shall so provide.
(b) In addition to the powers conferred on the Board by these Articles and
by the NGCL, and without limiting the generality thereof, the Board is
specifically authorized from time to time, by resolution of the Board without
additional authorization by the stockholders of the Company, to adopt, amend or
repeal the Bylaws, in such form and with such terms as the Board may determine,
including, without limiting the generality of the foregoing, Bylaws relating to
(i) regulation of the procedure for submission by stockholders of nominations of
persons to be elected to the Board, (ii) regulation of the attendance at annual
or special Stockholder Meetings by Persons other than holders of record or their
proxies, and (iii) regulation of the business that may properly be brought by a
stockholder of the Company before an annual or special meeting of stockholders
of the Company.
ARTICLE X
AMENDMENT OF CORPORATE DOCUMENTS
(a) ARTICLES. Whenever any vote of the holders of Voting Stock is required
by law to amend, alter, repeal or rescind any provision of these Articles, then
in addition to any affirmative vote required by applicable law and in addition
to any vote of the holders of any series of Preferred Stock provided for or
fixed pursuant to Article V, such alteration, amendment, repeal or rescission (a
"CHANGE") of any provision of these Articles must be approved by at least a
majority of the then-combined voting power of the then-outstanding shares of
Voting Stock, voting together as a single class; provided, however, that if any
such Change relates to Articles II, VI, VII, VIII, IX, or to this Article X,
such
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Change must also be approved by the affirmative vote of the holders of at
least 66 2/3% of the combined voting power of the then-outstanding shares of
Voting Stock, voting together as a single class; provided further, however, that
the vote(s) required by the immediately preceding clause shall not be required
if such Change has been first approved by at least two-thirds of the
then-authorized number of directors. Subject to the provisions hereof, the
Company reserves the right at any time, and from time to time, to amend, alter,
repeal or rescind any provision contained in these Articles in the manner now or
hereafter prescribed by law, and other provisions authorized by the laws of the
State of Nevada at the time in force may be added or inserted, in the manner now
or hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other Persons
whomsoever by and pursuant to these Articles in its present form or as hereafter
amended are granted subject to the rights reserved in this article.
(b) BYLAWS. In addition to any affirmative vote required by law, any Change
of the Bylaws may be adopted either (i) by the Board by the affirmative vote of
at least a majority of the then-authorized number of directors, or (ii) by the
stockholders by the affirmative vote of the holders of at least 66 2/3% of the
combined voting power of the then-outstanding shares of Voting Stock, voting
together as a single class.
ARTICLE XI
COMBINATIONS WITH INTERESTED STOCKHOLDERS
The corporation elects to be governed by Sections 78.411 to 78.444,
inclusive, of the NGCL.
ARTICLE XII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
No director or officer shall be personally liable to the Company or
stockholder for damages for breach of fiduciary duty as a director or officer,
except that this Article XII shall not eliminate or limit the liability of a
director or officer for (i) acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law or (ii) the payment of dividends
in violation of Section 78.300 of the NCGL. If the NGCL is hereafter amended or
interpreted to eliminate or limit further the personal liability of directors or
officers, then the liability of all directors and officers shall be eliminated
or limited to the full extent then so permitted. Neither the amendment nor
repeal of this Article XII, nor the adoption of any provision of these Articles
inconsistent with this Article XII, shall eliminate or reduce the effect of
Article XII in respect of any act or omission that occurred prior to such
amendment, repeal or adoption of an inconsistent provision.
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ARTICLE XIII
CONFLICT OF INTEREST
No contract or other transaction between the Company and any other Person
and no other acts of the Company with relation to any other Person shall, in the
absence of fraud, in any way be invalidated or otherwise affected by the fact
that any one or more of the directors or officers of the Company are pecuniarily
or otherwise interested in, or are directors or officers of, such other Person.
Any director or officer of the Company individually, or any firm or association
of which any director or officer may be a member, may be a party to, or may be
pecuniarily or otherwise interested in, any contract or transaction of the
Company, provided, however, the fact that he individually or as a member of such
firm or association is such a party or is so interested shall be disclosed or
shall have been known to the board of directors or a majority of such members
thereof as shall be present at any meeting of the board of directors at which
action upon any such contract or transaction shall be taken; and any director of
the Company who is also a director or officer of such other Person or who is
such a party or so interested may be counted in determining the existence of a
quorum at any meeting of the board of directors which shall authorize any such
contract or transaction and may vote thereat to authorize any such contract or
transaction, with like force and effect as if he wore not such a director or
officer of such other Person or not so interested. Any director of the Company
may vote upon any contract or any other transaction between the Company and any
subsidiary or affiliated Person without regard to the fact that he is also a
director or officer of such subsidiary or affiliated Person.
Any contract, transaction, act of the Company or of the directors, which
shall be ratified at any annual meeting of the stockholders of the Company, or
at any special meeting of the stockholders of the Company, or at any special
meeting called for such purpose, shall, insofar as permitted by law, be as valid
and as binding as though ratified by every stockholder of the Company; provided,
however, any failure of the stockholders to approve or ratify any such contract,
transaction or act, when and if submitted shall not be deemed in any way to
invalidate the terms or deprive the Company, its directors, officers or
employees, of its or their right to proceed with such contract, transaction or
act.
Subject to any express agreement which may from time to time be in effect,
any stockholder, director or officer of the Company may carry on and conduct in
his own right and for his own personal account, or as a partner in any
partnership, or as a joint venturer in any joint venture, or as an officer,
director or stockholder of any Person, or as a participant in any syndicate,
pool, trust or association, any business which competes with the business of the
Company and shall be free in all such capacities to make investments in any kind
of property in which the Company may make investments.
11
<PAGE> 12
ARTICLE XIV
TERM
This corporation is to have a perpetual existence.
ARTICLE XV
NO ASSESSMENTS
The capital stock of the Company after the amount of the subscription
price, or par value, has been paid in, shall not be subject to assessment to pay
debts of the Company, and no paid up stock, and no stock issued as fully paid,
shall ever be assessable or assessed.
Each of the undersigned does hereby make and file these Restated Articles
of Incorporation this 29th day of January 1998.
/S/ STEVEN H. MIKEL
-------------------------------------
STEVEN H. MIKEL
President and Chief Executive Officer
/S/ MARGIE C. EWALD
-------------------------------------
MARGIE C. EWALD
Secretary
12
<PAGE> 1
EXHIBIT 10.1
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
made and entered into effective as of the 31st day of December, 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, by
Third Amendment to Credit Agreement effective as of June 10, 1997, and by
Fourth Amendment to Credit Agreement effective as of June 30, 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 herein above.
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," "herein above," "herein below," "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.
<PAGE> 2
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 1.2. Section 1.2 of the Credit
Agreement is hereby amended to read as follows:
The following definitions are added and/or amended to read as
follows:
"Applicable Margin" shall mean as to each LIBO Rate Loan, the
following:
<TABLE>
<CAPTION>
Borrowing Base LIBO Rate Loan
Utilization Applicable Margin
------------------ -----------------
<S> <C>
1) greater than 66-2/3% two percent (2%)
of Borrowing Base
2) less than or equal to one and three-fourths
66-2/3% and greater than percent (1-3/4%)
33-1/3% of Borrowing Base
3) less than or equal to one and one-half
33-1/3% of Borrowing Base percent (1-1/2%)
</TABLE>
2
<PAGE> 3
The Borrowing Base Utilization and the corresponding LIBO Rate
shall be set at each quarter end for the next quarter. Borrower will
furnish to the Agent a Form of Borrowing Base Utilization, which is
attached as Exhibit V to this Agreement, which shall stipulate the
Borrowing Base Utilization level at the end of such quarter. Such
form shall be furnished to the Agent within five (5) days of the end
of such quarter."
"Borrowing Base Utilization" shall mean the aggregate
principal amount of Loans outstanding hereunder as a percentage of the
Borrowing Base."
II.2 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 December 31, 1997, is acknowledged by the Borrower, the
Co-Borrowers and the Lender to be $34,000,000. Upon completion of
Borrower's acquisition of Amerac Energy Corporation and Lender's
receipt of acceptable documentation related thereto, the Borrowing
Base shall be increased to $40,000,000. Commencing on February 1,
1998, 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 $400,000. In the event that Borrower has not furnished
Lender with a recorded copy of an assignment to Borrower of a 0.225
working interest and a 0.1575 net revenue interest in and to State of
Louisiana Oil and Gas Lease No. 14589, dated December 13, 1993,
recorded under Entry No. 761535, COB 1198, Page 149, of the records of
Lafourche Parish, Louisiana, on or before March 22, 1998, the Lender
shall redetermine the Borrowing Base by deleting the value given to
such lease."
II.3 Amendment of Section 2.10. Section 2.10 of the
Credit Agreement is amended by amending the first sentence to read as follows:
"To compensate the Lender for maintaining funds available, the
Borrower shall pay to the Lender a commitment fee 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 average daily amount of the Available
Commitment as follows:
<TABLE>
<CAPTION>
Borrowing Base
Utilization Commitment Fee
------------------ --------------
<S> <C>
1) greater than 50% one-half percent (1/2%)
of Borrowing Base
</TABLE>
3
<PAGE> 4
<TABLE>
<S> <C>
2) less than or equal to three-eighths percent (3/8%)
50% of Borrowing Base
</TABLE>
The Borrowing Base Utilization and the corresponding
Commitment Fee shall be set at each quarter end for the next quarter.
II.4 Amendment of Exhibit I. Exhibit I of the Credit
Agreement, i.e. the Form of Promissory Note, is amended as set forth on Exhibit
I to this Fifth Amendment.
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 and the Note, as
requested by the Lender;
(b) Mortgage, Deed of Trust, Security Agreement and Financing
Statement covering properties in Lake Raccourci Field and Big
Escambia Creek Field;
(c) Assignment of Contract Rights (Security Agreement)
covering various agreements concerning State of Louisiana Oil
and Gas Lease No. 14589, dated December 13, 1993, recorded
under Entry No. 761535, COB 1198, Page 149, of the records of
Lafourche Parish, Louisiana; and
(d) 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.
4
<PAGE> 5
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 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
5
<PAGE> 6
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.
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.
6
<PAGE> 7
IN WITNESS WHEREOF, this Amendment is executed effective as of
the date first herein above written.
SOUTHERN MINERAL CORPORATION
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY,INC.
BEC ENERGY, INC.
By:/s/ James H. Price
--------------------------------
James H. Price
Vice President-Finance
COMPASS BANK
By:/s/ Allison Hammer
--------------------------------
Allison Hammer
Vice President
7
<PAGE> 8
FIFTH AMENDMENT TO
CREDIT AGREEMENT
between
SOUTHERN MINERAL CORPORATION
BEC ENERGY, INC.
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY, INC.
and
COMPASS BANK
Effective as of
December 31, 1997
<PAGE> 9
EXHIBIT I
[FORM OF NOTE]
$100,000,000 Houston, Texas December 31, 1997
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned
("Maker") promises to pay to the order of COMPASS BANK, successor by merger to
Compass Bank - Houston ("Payee"), at its banking quarters in Houston, Harris
County, Texas, the sum of ONE HUNDRED MILLION DOLLARS ($100,000,000), or so
much thereof as may be advanced against this Note pursuant to the Credit
Agreement dated December 20, 1995, by and among Maker and Payee (as amended,
restated, or supplemented from time to time, the "Credit Agreement"), together
with interest at the rates and calculated as provided in the Credit Agreement.
Reference is hereby made to the Credit Agreement for matters
governed thereby, including, without limitation, certain events which will
entitle the holder hereof to accelerate the maturity of all amounts due
hereunder. Capitalized terms used but not defined in this Note shall have the
meanings assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is
payable as provided in the Credit Agreement. Subject to compliance with
applicable provisions of the Credit Agreement, Maker may at any time pay the
full amount or any part of this Note without the payment of any premium or fee,
but such payment shall not, until this Note is fully paid and satisfied, excuse
the payment as it becomes due of any payment on this Note provided for in the
Credit Agreement.
This Note is issued in renewal and replacement, but not as a
novation or discharge, of that certain Promissory Note dated December 20, 1995
in the original principal amount of $25,000,000, executed by Maker and payable
to the order of Compass Bank - Houston, now Payee.
Without being limited thereto or thereby, this Note is secured
by the Security Instruments.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE
STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT VERNON'S TEXAS CIVIL STATUTES,
ARTICLE 5069, CHAPTER 15 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN
ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY TO THIS NOTE.
<PAGE> 10
SOUTHERN MINERAL CORPORATION
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY, INC.
BEC ENERGY, INC.
By:/s/ James H. Price
-----------------------------------------
James H. Price
Vice President-Finance
<PAGE> 11
EXHIBIT V
[FORM OF BORROWING BASE UTILIZATION]
Compass Bank
24 Greenway Plaza, 14th Floor
Houston, Texas 77046
Attention: Energy Lending
Re: Credit Agreement dated as of December 20, 1995, by and
between Compass Bank, Southern Mineral Corporation, BEC
Energy, Inc. SMC Production Co., and Spruce Hills Production
Company, Inc. (as amended, restated, or supplemented from time
to time, the "Credit Agreement")
Ladies and Gentlemen:
Pursuant to applicable requirements of the Credit Agreement, the
undersigned, as Responsible Officers of the Borrowers and the Guarantors,
hereby certify to you the following information as true and correct as of the
date hereof or for the period indicated, as the case may be:
To the best knowledge of the undersigned, the Borrowing Base
Utilization as described in the definition of Applicable Margin for the quarter
ending __________, 19__, was as follows, and the LIBO Rate Loan Applicable
Margin for the following quarter is as follows:
<TABLE>
<CAPTION>
Borrowing Base LIBO Rate Loan
Utilization Applicable Margin
--------------------------------------------------------------------
<S> <C>
[1) greater than 66-2/3% two percent (2%)
of Borrowing Base
2) less than or equal to 66-2/3% one and three-fourths
and greater than 33-1/3% percent (1-3/4%)
of Borrowing Base
3) less than or equal to one and one-half
33-1/3% of Borrowing Base percent (1-1/2%)]
</TABLE>
To the best knowledge of the undersigned, the Borrowing Base
Utilization for the quarter ending __________, 19__, was as follows and the
Commitment Fee as described in Section 2.11 for the following quarter is as
follows:
<PAGE> 12
<TABLE>
<CAPTION>
Borrowing Base
Utilization Commitment Fee
--------------------------------------------------------------
<S> <C>
[1) greater than 50% one-half percent (1/2%)
of Borrowing Base
2) less than or equal to 50% three-eighths percent (3/8%)
of Borrowing Base]
</TABLE>
Each capitalized term used but not defined herein shall have the
meaning assigned to such term in the Credit Agreement.
Very truly yours,
SOUTHERN MINERAL CORPORATION
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY, INC.
BEC ENERGY, INC.
By:/s/ James H. Price
-------------------------------------
James H. Price
Vice President-Finance
<PAGE> 1
EXHIBIT 10.2
SIXTH AMENDMENT TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
made and entered into effective as of the 28th day of January, 1998, 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 and AMERAC
ENERGY CORPORATION, a Delaware 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, by
Third Amendment to Credit Agreement effective as of June 10, 1997, by Fourth
Amendment to Credit Agreement effective as of June 30, 1997, and by Fifth
Amendment to Credit Agreement effective as of December 31, 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 herein above.
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," "herein above,"
<PAGE> 2
"herein below," "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.
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
II.1 Addition of Co-Borrower. The Credit Agreement is
hereby amended to add AMERAC ENERGY CORPORATION as a Co-Borrower.
II.2 Amendment of Exhibit I. Exhibit I of the Credit
Agreement, i.e. the Form of Promissory Note, is amended as set forth on Exhibit
I to this Sixth Amendment.
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 and the Note, as
requested by the Lender;
(b) Mortgage, Deed of Trust, Security Agreement and Financing
Statement covering properties of Amerac Energy Corporation;
and
<PAGE> 3
(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 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.
3
<PAGE> 4
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.
4
<PAGE> 5
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.
5
<PAGE> 6
IN WITNESS WHEREOF, this Amendment is executed effective as of
the date first herein above written.
SOUTHERN MINERAL CORPORATION
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY,INC.
BEC ENERGY, INC.
By:/s/ James H. Price
----------------------------------
James H. Price
Vice President-Finance
COMPASS BANK
By:/s/ Allison Hammer
--------------------------------
Allison Hammer
Vice President
6
<PAGE> 7
SIXTH AMENDMENT TO
CREDIT AGREEMENT
between
SOUTHERN MINERAL CORPORATION
BEC ENERGY, INC.
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY, INC.
AMERAC ENERGY CORPORATION
and
COMPASS BANK
Effective as of
January 28, 1998
<PAGE> 8
EXHIBIT I
[FORM OF NOTE]
$100,000,000 Houston, Texas January 28, 1998
FOR VALUE RECEIVED and WITHOUT GRACE, the undersigned
("Maker") promises to pay to the order of COMPASS BANK, ("Payee"), at its
banking quarters in Houston, Harris County, Texas, the sum of ONE HUNDRED
MILLION DOLLARS ($100,000,000), or so much thereof as may be advanced against
this Note pursuant to the Credit Agreement dated December 20, 1995, by and
among Maker and Payee (as amended, restated, or supplemented from time to time,
the "Credit Agreement"), together with interest at the rates and calculated as
provided in the Credit Agreement.
Reference is hereby made to the Credit Agreement for matters
governed thereby, including, without limitation, certain events which will
entitle the holder hereof to accelerate the maturity of all amounts due
hereunder. Capitalized terms used but not defined in this Note shall have the
meanings assigned to such terms in the Credit Agreement.
This Note is issued pursuant to, is the "Note" under, and is
payable as provided in the Credit Agreement. Subject to compliance with
applicable provisions of the Credit Agreement, Maker may at any time pay the
full amount or any part of this Note without the payment of any premium or fee,
but such payment shall not, until this Note is fully paid and satisfied, excuse
the payment as it becomes due of any payment on this Note provided for in the
Credit Agreement.
This Note is issued in renewal and replacement, but not as a
novation or discharge, of that certain Promissory Note dated December 31, 1997
in the original principal amount of $100,000,000, executed by Maker and payable
to the order of Payee.
Without being limited thereto or thereby, this Note is secured
by the Security Instruments.
THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY THE LAWS OF THE
STATE OF TEXAS WITHOUT GIVING EFFECT TO PRINCIPLES THEREOF RELATING TO
CONFLICTS OF LAW; PROVIDED, HOWEVER, THAT VERNON'S TEXAS CIVIL STATUTES,
ARTICLE 5069, CHAPTER 15 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN
ACCOUNTS AND REVOLVING TRIPARTY ACCOUNTS) SHALL NOT APPLY TO THIS NOTE.
<PAGE> 9
SOUTHERN MINERAL CORPORATION
SMC PRODUCTION CO.
SPRUCE HILLS PRODUCTION COMPANY, INC.
BEC ENERGY, INC.
By:/s/ James H. Price
--------------------------------------------
James H. Price
Vice President-Finance
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on from S-4 (No. 333-42045) of
Southern Minerals Corporation of our report dated March 25, 1997 relating to
the consolidted financial statements of Amerac Energy Corporation, which
appears in the Current Report on Form 8-K of Southern Minerals Corporation
dated February 11, 1998.
/s/ PRICE WATERHOUSE LLP
Fort Worth, TX
February 11, 1998
<PAGE> 1
EXHIBIT 99.1
[SOUTHERN MINERAL CORPORATION LETTERHEAD]
NEWS RELEASE
January 28, 1998
SOUTHERN MINERAL AND AMERAC ENERGY COMPLETE MERGER
HOUSTON -- Southern Mineral Corporation (NASDAQ:SMIN) today announced that the
stockholders of both Southern Mineral Corporation and Amerac Energy Corporation
(AMEX:AMC) have approved the previously announced agreement to merge Amerac
Energy into a subsidiary of Southern Mineral Corporation. Pursuant to the
merger agreement Southern Mineral will issue 3,333,333 shares of its common
stock to acquire 3,917,339 share of common stock of Amerac Energy Corporation,
or an exchange ratio of .8509 shares of Southern Mineral Corporation common
stock for each share of common stock of Amerac Energy Corporation. The merger
is effective as of January 28, 1998, and Amerac Energy Corporation will
continue to operate as a wholly owned subsidiary of Southern Mineral
Corporation.
Southern Mineral Corporation is an oil and gas acquisition, exploration and
production company that owns interests in oil and gas properties located along
the Gulf Coast, Canada and Ecuador. The Company is listed on the NASDAQ
National Market under the symbol SMIN.
