EXHIBIT 10.4(e)
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SIXTH AMENDMENT TO CREDIT AGREEMENT
BY AND BETWEEN GMX RESOURCES, INC.
AND LOCAL OKLAHOMA BANK, N.A.
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is
executed to be effective as of the 1st day of March, 2004 by and between GMX
RESOURCES INC., an Oklahoma corporation, ENDEAVOR PIPELINE INC., an Oklahoma
corporation, and EXPEDITION NATURAL RESOURCES INC., an Oklahoma corporation (the
"Borrowers") and LOCAL OKLAHOMA BANK (the "Bank").
W I T N E S S E T H:
WHEREAS, effective October 31, 2000 Borrowers and Bank entered into
that certain Credit Agreement (the "Original Agreement") whereby Bank provided
Borrowers with a revolving line of credit in an amount governed by a Borrowing
Base which shall not exceed $15,000,000.00, as evidenced by reducing revolving
promissory note with a stated like amount of even date with the Original
Agreement (the "Original Note").
WHEREAS, as of June 18, 2001, Borrowers and Bank amended the
Original Agreement for the first time (the "First Amendment") in order to permit
certain preferred stock dividends and to evidence certain other changes as set
forth therein.
WHEREAS, as of May 28, 2002, Borrowers and Bank amended the Original
Agreement as amended by the First Amendment for the second time (the "Second
Amendment") in order to increase the rate of interest, include a termination
fee, alter the reporting requirements and to make such additional changes as are
set forth therein.
WHEREAS, as of August 14, 2002 Borrowers and Bank amended the
Original Agreement as amended by the First and Second Amendments for the third
time (the "Third Amendment") in order to modify certain financial covenants as
referenced therein.
WHEREAS, certain portions of the Original Agreement as amended by
First, Second and Third Amendments were amended by a Loan Modification and
Forbearance Agreement in May of 2003 and a Second Loan Modification and
Forbearance Agreement in June 2003 (the "Forbearance Agreements").
WHEREAS, as of August 31, 2003 Borrowers and Bank amended the
Original Agreement, as amended by the First, Second and Third Amendments for the
fourth time (the "Fourth Amendment") in order to extend the maturity date of the
Note, and to modify certain financial covenants as set forth therein.
WHEREAS, as of January 16, 2004, Borrowers and Bank amended the
Original Agreement, as amended by the First, Second, Third, and Fourth
Amendments for the fifth time (the "Fifth Amendment") in order to modify the
reporting requirements, modify certain financial covenants, and to permit
certain additional indebtedness (the Original Agreement as amended by
the First, Second, Third, Fourth and Fifth Amendments and as further modified by
the Forbearance Agreements is referred to herein as the "Agreement")
WHEREAS, the obligations described in the Agreement are secured by,
among other things not specifically set forth herein, certain oil and gas
properties and other properties as set forth in the Agreement; and
WHEREAS, all capitalized terms not otherwise defined herein shall
have those meanings assigned to such terms in the Agreement;
WHEREAS, Borrowers and Bank desire to amend the Agreement for the
sixth time in order to evidence such changes to the Agreement as more
particularly set forth herein;
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrowers and the
Bank hereby agree to amend the Agreement as follows:
A. CHANGES TO THE AGREEMENT
1. The reference to "March 1, 2004" in the definition of "Maturity
Date" set forth in Section 1.2 of the Agreement, Additional Defined Terms, is
hereby replaced with "September 1, 2004" in order to evidence the agreement of
the parties to extend the Maturity Date.
2. To evidence the Borrowers' continuing obligation to repay the
Note, the Borrower shall make and deliver to the Bank the amended and restated
promissory note in the form of Annex "1" hereto attached (the "Replacement
Note"), which shall substitute and replace in its entirety the Note referred to
in the Agreement, without cancellation, novation or payment.
3. The document attached hereto as Annex "1" shall replace in its
entirety that document attached to the Agreement as Exhibit "A".
4. Pursuant to Section 2.9 of the Agreement, from the date hereof
until the next Borrowing Base Determination the Borrowing Base shall be
$6,310,000.00.
5. Pursuant to Section 2.9 of the Agreement, Borrowing Base
Determinations, beginning April 1, 2004 and continuing on the first day of each
month thereafter until re-determined pursuant to Section 2.9 of the Agreement,
the Monthly Commitment Reduction shall be $90,000.00.
6. Except as otherwise set forth above, all other terms, covenants,
and conditions of the Agreement and all loans and/or notes are unaffected by
this Amendment.
B. REPRESENTATIONS AND WARRANTIES
Each Borrower hereby represents and warrants to Bank that:
1. Each Borrower is a corporation, duly organized, legally existing,
and in good standing under the laws of the State of Oklahoma, and is duly
qualified as a foreign corporation and in good standing in all other states
wherein the nature of its business or its assets make such qualification
necessary.
2. Each Borrower's execution and delivery of this Amendment and
performance of its obligations hereunder: (a) are and will be within its powers;
(b) are duly authorized by its board of directors; (c) are not and will not be
in contravention of any law, statute, rule or regulation, the terms of its
articles or incorporation and bylaws, nor of any agreement or undertaking to
which any Borrower or any of its properties are bound; (d) do not require any
consent or approval (including governmental) which has not been given; and (e)
will not result in the imposition of liens, charges or encumbrances on any of
its properties or assets, except those in favor of Bank hereunder.
3. This Amendment, when duly executed and delivered, will constitute
the legal, valid and binding obligations of Borrowers, enforceable in accordance
with its terms.
4. All financial statements, balance sheets, income statements and
other financial data which have been or are hereafter furnished to Bank by
Borrowers to induce Bank to make the loans hereunder due, and as to subsequent
financial statements will, fairly represent each Borrower's financial condition
as of the dates for which the same are furnished. All such financial statements,
reports, papers and other data furnished to Bank are and will be, when
furnished: prepared in accordance with generally accepted accounting principles
consistently applied; accurate and correct in all material respects; and
complete insofar as completeness may be necessary to give Bank a true and
accurate knowledge of the subject matter. Since the date of the last such
financial statements, no material adverse change has occurred in the operations
or condition, financial or otherwise and other financial data provided to Bank;
of any Borrower, nor, to the best of their knowledge, has any Borrower incurred,
any material liabilities or made any material investment or guarantees, direct
or contingent, in any single case or in the aggregate, which has not been
disclosed to Bank.
5. The Borrowers are the sole and lawful owner of the Collateral,
pledged, mortgaged or assigned by it, and Borrowers have, and as to after
acquired property or new properties will have, good right to cause the
Collateral to be hypothecated to Bank as security for the obligations described
in the Agreement, as amended hereby. Further, the ownership interests set forth
in that certain Engineering Report dated March 15, 2004 from Xxxxxxx Associates,
Inc. purported to be owned by Borrowers, or any one of them, are true and
correct and Borrowers do, in fact, own such interests in such Collateral.
6. The Collateral set forth on that certain Engineering Report dated
March 15, 2004 from Xxxxxxx Associates, Inc. is free and clear of all mortgages,
liens and encumbrances, except for Permitted Liens. Further, Borrowers have no
invoices for labor related to such properties or materials provided to such
properties which have not been paid within 90 days from the date such invoice is
due and payable.
7. All of each Borrower's other representations and warranties set
forth in Section 8 of the Agreement, Representations and Warranties, are true
and correct on and as of the date hereof with the same effect as though made and
repeated by such Borrower as of the date hereof.
C. CONDITIONS
Bank's obligations under the Agreement, as hereby amended, are
subject to the following conditions:
1. Bank and Borrowers shall have executed and delivered this
Amendment.
2. Borrowers shall have paid Bank an amendment fee in the amount of
$25,000.00.
3. Borrowers shall have executed and delivered such mortgages or
deeds of trust as are necessary, in Bank's discretion, to mortgage to Bank 100%
of all of Borrowers' Oil and Gas Properties given value by Bank in the Borrowing
Base as well as any interest of any Borrower in properties currently being
developed either (i) through the joint venture agreement with Penn-Virginia Oil
and Gas Corporation or (ii) with proceeds from Borrowers' recently completed
subordinated debt issue.
4. Borrowers shall, or will from time to time, have executed such
additional mortgages, deeds of trust, financing statement and such other
documents as are deemed necessary by Bank in order to perfect a lien in favor of
Bank in and to those Oil and Gas Properties necessary to achieve the percentages
required by the covenants set forth herein.
5. Each Borrower's representations and warranties set forth in
Section B hereof shall be true and correct on and as of the date hereof, and the
date of any subsequent advance with the same effect as though such
representation and warranty had been on and as of such date.
6. Each Borrower shall have delivered copies of any amendments to
each such Borrower's Articles of Incorporation and/or Certificate of
Incorporation and all amendments to each such Borrower's by laws occurring
subsequent to the date of the Original Agreement accompanied by a certificate
issued by the secretary or an assistant secretary of the Borrowers, to the
effect that each such copy is correct and complete or a certificate that no such
amendments have occurred;
7. Each Borrower shall have delivered a current certificate of
incumbency and signature of all of each Borrower's officers who are authorized
to execute Loan Documents on behalf of such Borrower, executed by the secretary
or an assistant secretary of such Borrower;
8. Each Borrower shall have delivered copies of corporate
resolutions approving this Sixth Amendment, the Replacement Note and any other
documents required by Bank to be executed by each Borrower authorizing the
transactions contemplated herein and therein, duly adopted by the board of
directors of each of the Borrowers, accompanied by a certificate of the
respective secretary or an assistant secretary of each Borrower, to the effect
that such copies are true and correct copies of resolutions duly adopted at a
meeting or by unanimous consent of the board of directors of each Borrower and
that such resolutions constitute all the resolutions
adopted with respect to such transactions, have not been amended, modified, or
revoked in any respect, and are in full force and effect as of the date of such
certificate;
9. Borrowers shall have satisfied all conditions set forth in the
Agreement.
10. As of the date hereof, and the date of any subsequent Advance,
no Event of Default nor any event which, with the giving of notice or lapse of
time, would constitute an Event of Default shall have occurred and be
continuing.
D. OTHER NOTICES, COVENANTS AND MISCELLANEOUS TERMS
1. As set forth above, the Bank hereby notifies Borrower that from
the date hereof the Borrowing Base shall be $6,310,000.00 and the Monthly
Commitment Reduction is $90,000.00 beginning April 1, 2004.
2. Except as expressly amended and supplemented hereby, the
Agreement shall remain unchanged and in full force and effect, and the same is
hereby ratified and extended.
3. The obligations described in the Agreement, as amended hereby,
including but not limited to the indebtedness evidenced by the Note executed in
conjunction with the Agreement, shall continue to be secured by the Collateral,
without interruption or impairment of any kind.
4. To the extent the amendment fee referred to in Section C.2 above
is not paid prior to closing Borrower shall have until April 30, 2004 to remit
such fee to the Bank. Borrower's failure to make such a payment by April 30,
2004 shall constitute a default pursuant to Section 9.1(a) of the Agreement
entitling the Bank to pursue the remedies set forth in Section 9.2(b) of the
Agreement.
5. Borrowers agree to execute such additional mortgages, deeds of
trust and/or amendments to such documents already in place as Bank deems
necessary to adequately secure the loan at any time and from time to time
hereafter.
6. The Borrowers hereby agree to pay all reasonable attorney fees
and legal expenses incurred by Bank in preparation, execution and implementation
of this Amendment and any mortgages, guaranty agreements, subordination
agreements, deeds of trust, security agreements, pledge agreements or any
amendments thereto.
7. This Amendment shall be construed in accordance with and governed
by the laws of the State of Oklahoma, and shall be binding on and inure to the
benefit of the Borrower and Bank, and their respective successors and assigns.
All obligations of the Borrowers under the Agreement and all rights of Bank and
any other holder of the Note, whether expressed herein or in any Note, shall be
in addition to and not in limitation of those provided by applicable law.
Borrowers irrevocably agree that, subject to Bank's sole election, all suits or
proceedings arising from or related to the Agreement, as amended, or the Note
may be litigated in courts (whether State or Federal) sitting in Oklahoma City,
Oklahoma, and the Borrowers hereby irrevocably waives any objection to such
jurisdiction and venue.
8. This Amendment may be executed in as many counterparts as are
deemed necessary or convenient, and it shall not be necessary for the signature
of more than any one party to appear on any single counterpart. Each counterpart
shall be deemed an original, but all shall be construed together as one and the
same instrument. The failure of any party to sign shall not affect or limit the
liability of any party executing any such counterpart.
E. RELEASE. Borrowers hereby remise, release, and forever discharge
Bank, its successors and assigns, its officers, directors, employees, agents and
attorneys (collectively, "Released Parties") of and from all actions, causes of
action, suits, proceedings, debts, contracts, claims, damages, liability and
demands whatsoever, known or unknown, in law or equity, which Borrowers ever had
or now has, by reason of any matter, cause, or thing whatsoever arising from the
actions or inactions of the Released Parties in any matter relating to the
Agreement, Note, and other Loan Documents (collectively, "Released Matters");
and Borrowers covenant not to xxx any of the Released Parties with respect to
the Released Matters. The release and covenant not to xxx set forth in this
provision are intended by the parties to be as broad and comprehensive as
possible.
So executed effective the 1st day of March, 2004.
BORROWERS:
GMX RESOURCES INC.,
an Oklahoma corporation
/s/ Xxx X. Xxxxxxxxx, Xx.
-----------------------------------------
By: Xxx X. Xxxxxxxxx, Xx.
Title: Chief Financial Officer
ENDEAVOR PIPELINE INC.,
an Oklahoma corporation
/s/ Xxx X. Xxxxxxxxx, Xx.
-----------------------------------------
By: Xxx X. Xxxxxxxxx, Xx.
Title: Chief Financial Officer
EXPEDITION NATURAL RESOURCES INC.,
an Oklahoma corporation
/s/ Xxx X. Xxxxxxxxx, Xx.
-----------------------------------------
By: Xxx X. Xxxxxxxxx, Xx.
Title: Chief Financial Officer
BANK:
LOCAL OKLAHOMA BANK
/s/ Xxxx X. Xxxx, Xx.
-----------------------------------------
By: Xxxx X. Xxxx, Xx.
Title: Senior Vice President
EXHIBIT TO SIXTH AMENDMENT TO CREDIT AGREEMENT
BY AND BETWEEN GMX RESOURCES, INC.
AND LOCAL OKLAHOMA BANK, N.A.
THIRD AMENDED AND RESTATED PROMISSORY NOTE
(REDUCING REVOLVING NOTE)
$15,000,000.00 Oklahoma City, Oklahoma
March 1, 2004
FOR VALUE RECEIVED, the undersigned, GMX Resources Inc., an Oklahoma
corporation, Endeavor Pipeline Inc., an Oklahoma corporation, and Expedition
Natural Resources Inc., an Oklahoma corporation (jointly and severally, the
"Borrowers"), hereby jointly and severally promise to pay to the order of LOCAL
OKLAHOMA BANK ("Bank"), on or before September 1, 2004 (the "Maturity Date"),
the principal sum of Fifteen Million and No/100 Dollars ($15,000,000.00), or as
much thereof as is disbursed and remains outstanding hereunder, together with
interest on the unpaid balance from time to time outstanding at the rates
hereinafter provided.
Prior to the occurrence of any Event of Default (as defined in the
Agreement referred to below), the unpaid principal balance from time to time
outstanding hereunder shall bear interest at a fluctuating rate per annum equal
to the Base Rate (defined below) plus one percent (1%). Upon notice from Bank to
Borrowers of the occurrence of any Event of Default, the unpaid principal amount
from time to time outstanding under this Note shall bear interest at a
fluctuating rate per annum equal to the Default Rate as set forth below (but not
less than the Base Rate in effect on the date of the occurrence of the Event of
Default). The interest rate applicable to this Note shall change as of the
effective date of any change in the Base Rate. The interest rate will be
calculated on the basis of actual number of days elapsed, but computed as if
each calendar year consisted of a 360-day year. As used herein, "Base Rate"
means, at any time, that rate of interest equal to the interest rate then most
recently announced or published in the "Money Rates" section of THE WALL STREET
JOURNAL, as the "Prime Rate" which such rate may not be the lowest interest rate
charged by the Bank, and which Base Rate shall change upon any change in such
announced or published Base Rate, all without notice to the Borrowers.
If any Event of Default occurs and is not cured within the
applicable cure period, if any, described in the Agreement, in lieu of the
interest rate provided in this Note, all sums owing by Borrowers to Bank shall
bear interest at the rate equal to five percent (5%) per annum in excess of the
Base Rate, accrued from the date after the applicable grace period to cure the
Event of Default, to the date on which such Event of Default is cured to the
reasonable satisfaction of the Bank.
Beginning on the first (1st) day of April, 2004 and continuing on
the first (1st) day of each month thereafter, Borrowers shall, at a minimum,
make a payment of all accrued but unpaid interest on this Note. If the Loan
Balance exceeds the Commitment Amount as a result of a Monthly Commitment
Reduction with respect to the Loan on the first (1st) day of any month, the
Borrowers shall immediately make such principal payments as may be necessary to
reduce the Loan Balance to an amount at or below the Commitment Amount. The
entire outstanding
principal balance of this Note and all unpaid interest accrued thereon shall be
due and payable on the Maturity Date.
All payments, including prepayments, made by Borrowers, shall be
made to Bank at any one of its offices in the State of Oklahoma, on or before
2:00 p.m., local time, on the date due, in lawful money of the United States of
America and in immediately available funds. If any payment is due on a day other
than a business day, the due date thereof shall be extended to the next
succeeding business day.
This Note is executed and delivered by Borrowers pursuant to, and is
entitled to the benefits of, that certain Restated Credit Agreement dated
effective October 31, 2000 between Borrowers and Bank as amended from time to
time and most recently by that certain Sixth Amendment to Restated Credit
Agreement of even date herewith (the "Agreement"). Reference is hereby made to
the Agreement for the terms and provisions regarding the availability of credit,
the collateral security for payment of this Note, the prepayment rights and
obligations of Borrowers, the right of the holder of this Note to accelerate the
maturity hereof on the occurrence of certain Events of Default specified
therein, and for all other pertinent purposes. This Note is the "Note" referred
to in the Agreement. All capitalized terms not otherwise defined herein shall be
defined as set forth in the Agreement.
Upon the occurrence and during the continuation of any Event of
Default, the holder of this Note may apply payments received on any amount due
hereunder or under the terms of any instrument now or hereafter evidencing or
securing any said indebtedness as said holder may determine.
It is the intent of Bank and Borrowers to conform strictly to all
applicable usury laws, and any interest on the principal balance hereof in
excess of that allowed by said usury laws shall be subject to reduction to the
maximum amount of interest allowed under said laws. If any interest in excess of
the maximum amount of interest allowable by said usury laws is inadvertently
paid to the holder hereof, at any time, any such excess interest shall be
refunded by the holder to the party or parties entitled to the same after
receiving notice of payment of such excess interest.
The records of the holder of this Note shall be prima facie evidence
of the amount owing on this Note.
If, and as often as, this Note is placed in the hands of an attorney
for collection or to defend or enforce any of the holder's rights hereunder,
Borrowers will pay to the holder hereof its reasonable attorneys' fees, together
with all court costs and other expenses paid by such holder.
Borrowers, endorsers, sureties, guarantors and all other parties who
may become liable for all or any part of this Note severally waive demand,
presentment, notice of dishonor, protest, notice of protest, and notice of
non-payment, and consent to: (a) any and all extensions of time for any term or
terms regarding any payment due under this Note, including partial payments or
renewals before or after maturity; (b) changes in interest rates; (c) any
substitutions or release of collateral; and (d) the addition, substitution or
release of any party liable for payment of this Note.
No waiver of any payment or other right under this Note or any
related agreement shall operate as a waiver of any other payment or right. All
of the holder's rights hereunder are cumulative and not alternative. This Note
shall inure to the benefit of the successors and assigns of Bank or other holder
and shall be binding upon the successors and assigns of Borrowers.
This Note has been delivered to and accepted by Bank in the State of
Oklahoma, is to be performed in the State of Oklahoma and shall be deemed a
contract made under the laws of the State of Oklahoma.
The purposes of this Note is to Amend and Restate the terms of that
certain Second Amended and Restated Promissory Note (Reducing Revolving Note)
dated effective August 31, 2003. This Note does NOT pay off any outstanding
indebtedness. Rather, the purpose hereof is to amend the rate of interest
charged to outstanding balances hereunder.
IN WITNESS WHEREOF, the undersigned has executed this instrument
effective for all purposes as of March 1, 2004.
BORROWERS:
GMX RESOURCES INC.,
an Oklahoma corporation
/s/ Xxx X. Xxxxxxxxx, Xx.
-----------------------------------------
By: Xxx X. Xxxxxxxxx, Xx.
Title: Chief Financial Officer
ENDEAVOR PIPELINE INC.,
an Oklahoma corporation
/s/ Xxx X. Xxxxxxxxx, Xx.
-----------------------------------------
By: Xxx X. Xxxxxxxxx, Xx.
Title: Chief Financial Officer
EXPEDITION NATURAL RESOURCES INC.,
an Oklahoma corporation
/s/ Xxx X. Xxxxxxxxx, Xx.
-----------------------------------------
By: Xxx X. Xxxxxxxxx, Xx.
Title: Chief Financial Officer
