Exhibit 10.2
Execution
Copy
AMENDMENT NO. 5 TO NOTE PURCHASE
AGREEMENT, LIMITED CONSENT
AND LIMITED WAIVER
THIS AMENDMENT NO. 5 TO NOTE
PURCHASE AGREEMENT, LIMITED CONSENT AND LIMITED WAIVER (this
“ Amendment ”), dated as of October 18,
2009, is between GMX Resources Inc., an Oklahoma corporation (the
“ Company ”), and the noteholder listed on the
signature page hereto (the “ Noteholder
”).
R E C I T A L S:
A. The Company and the Noteholder
entered into a Note Purchase Agreement dated as of July 31,
2007, as amended by that certain Amendment No. 1 to Note
Purchase Agreement and Limited Consent dated February 11,
2008, Amendment No. 2 to Note Purchase Agreement dated
June 12, 2008, Amendment No. 3 to Note Purchase Agreement
and Limited Waiver dated as of February 27, 2009, and
Amendment No. 4 to Note Purchase Agreement and Limited Waiver
dated as of May 6, 2009 (as so amended, the “ Note
Agreement ”). Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to them in the Note
Agreement.
B. Reference is made to the
Subordinated Guaranty Agreement (the “ Guaranty
Agreement ”) dated as of July 31, 2007, entered into
by Endeavor Pipeline Inc., an Oklahoma corporation (“
Endeavor ”), and Diamond Blue Drilling Co., an
Oklahoma corporation (together with Endeavor, the “
Subsidiary Guarantors ”).
C. The Company has advised the
Noteholder that the Company intends to issue unsecured fixed rate
convertible notes with a stated maturity date of no earlier than
December 31, 2013 (the “ 2009 Convertible Debt
”).
D. The Company has requested that
the Noteholder agree to consent to the issuance of the 2009
Convertible Debt and the performance by the Company of its
obligations thereunder (to the extent such issuance or performance
would otherwise violate paragraphs 6B(iii), 6D or 6P of the Note
Agreement) as more fully described herein below.
E. The Company has also advised the
Noteholder of its intent to prepay the Notes not later than 12:00
noon New York City local time on the earlier of (x) the first
Business Day following the issuance of the 2009 Convertible Debt
and (y) October 30, 2009 and pursuant to paragraph 4B(1)
of the Note Agreement (as such prepayment is described more fully
in Section 4(b) of this Amendment), which prepayment is set to
occur less than the required 10 Business Days from the date of
notice thereof provided to the Noteholder pursuant to paragraph 4C
of the Note Agreement (the “ Subject Notice
Requirement ”).
F. The Company has also requested
that the Noteholder waive the Subject Notice Requirement pursuant
to paragraph 11C of the Note Agreement as more fully described
herein below.
G. The Company has further advised
the Noteholder that an Event of Default may have occurred and may
be continuing under paragraph 6A(2) of the Note Agreement due to
the Company’s failure to maintain the minimum Total Debt to
EBITDA Ratio financial covenant during the period from
August 1, 2009 through October 30, 2009 (the “
Subject Default ”).
H. The Company has further requested
that the Noteholder waive the Subject Default pursuant to paragraph
11C of the Note Agreement as more fully described herein
below.
I. The Company has further requested
that the Noteholder agree to the amendments to the Note Agreement
as more fully described herein below.
NOW, THEREFORE,
in consideration of the premises and
the covenants, terms, conditions, representations and warranties
herein contained, the parties hereto hereby agree as
follows:
Section 1. AMENDMENT TO THE
NOTE AGREEMENT. Subject
to the covenants, terms and conditions set forth herein and in
reliance upon the representations and warranties of the Company
herein contained, the Company and the Noteholder hereby agree to
amend the Note Agreement as set forth below, effective as of the
Amendment Effective Date (as hereinafter defined):
Amendment to Existing Defined
Term. The following
defined term in paragraph 10B of the Note Agreement is hereby
amended and restated in its entirety to read as follows:
“ Change in Management
” shall mean that Ken Kenworthy, Jr. shall cease to continue
in the active, full-time employment of the Company as Chief
Executive Officer; provided , that the cessation of active
employment of such officer due to death or disability shall not
constitute a “Change in Management” so long as the
Company hires or promotes a replacement officer with experience and
qualifications reasonably acceptable to the Required Holders within
four months after the former officer’s cessation of
activity.
Section 2. AFFIRMATION OF
OBLIGATIONS; ACKNOWLEDGMENT OF COLLATERAL.
(a) The Company and, by their
execution of the acknowledgment hereto, the Guarantors hereby
specifically reaffirm all of the Security Documents. The Company
and, by their execution of the acknowledgment hereto, the
Guarantors hereby confirm and agree that the Security Documents
secure the Obligations.
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(b) Notwithstanding that such
consent is not required under the Guaranty Agreement, or any of the
other Note Documents to which it is a party, each of the Guarantors
consents to the execution and delivery of this Amendment by the
parties hereto. As a material inducement to the undersigned to
amend the Note Agreement as set forth herein, each of the
Guarantors (i) acknowledges and confirms the continuing
existence, validity and effectiveness of the Guaranty Agreement and
each of the other Note Documents to which it is a party and
(ii) agrees that the execution, delivery and performance of
this Amendment shall not in any way release, diminish, impair,
reduce or otherwise affect its obligations thereunder.
Section 3. LIMITED CONSENT
AND AGREEMENT. Subject to
the terms and conditions set forth herein, and in reliance upon the
representations and warranties of the Company set forth herein, the
Noteholder hereby consents to the issuance of the 2009 Convertible
Debt and the performance by the Company of its obligations
thereunder, to the extent that such issuance or performance would
otherwise violate paragraphs 6B(iii), 6D or 6P of the Note
Agreement; provided that, (x) notwithstanding the
provisions of paragraph 6S of the Note Agreement, the 2009
Convertible Debt shall be Indebtedness of the Company which
(i) does not exceed $86,250,000 in aggregate principal amount,
(ii) is not secured by any Liens, (iii) has a stated
maturity date of no earlier than December 31, 2013 and
(iv) if the Company fails to prepay the Noteholder, in
accordance with paragraph 4B(1) of the Note Agreement, all amounts
due and payable pursuant to such paragraph (including, but not
limited to, the outstanding principal and accrued interest on the
Notes and any Yield-Maintenance Amount with respect to each such
Note) not later than 12:00 noon New York City local time on the
earlier of (a) the first Business Day following the issuance
of the 2009 Convertible Debt and (b) October 30, 2009
(such prepayment terms (including the due date) and amounts are
collectively referred to herein as the “ Subject
Prepayment ”), such 2009 Convertible Debt shall not be
subject to conversion, redemption or repurchase prior to
December 31, 2013 and (y) no payments prohibited by
paragraph 6B(iii) shall be made in respect of the 2009 Convertible
Debt unless the Noteholder receives the Subject Prepayment; and,
provided further that in consideration for such
consent and the waivers contained in this Amendment, if the 2009
Convertible Debt is issued, the Notes shall be prepaid in
accordance with paragraph 4B(1) of the Note Agreement and all
amounts due and payable pursuant to such paragraph (including, but
not limited to, the outstanding principal and accrued interest on
the Notes and any Yield-Maintenance Amount with respect to each
such Note) shall be received by the Noteholder not later than 12:00
noon New York City local time on the earlier of (aa) the first
Business Day following the issuance of the 2009 Convertible Debt
and (bb) October 30, 2009 and such amounts shall be due and
payable as of such date in accordance with the Note Agreement. This
consent shall not be a precedent for any subsequent requested
waiver of (or consent under) these or any other covenants or other
provisions of the Note Agreement.
Section 4. LIMITED WAIVER
AND AGREEMENT.
(a) The Company hereby acknowledges
that the Subject Default may have occurred and may be continuing.
Subject to the terms and conditions set forth herein, and in
reliance upon the representations and warranties of the Company set
forth herein, the Noteholder hereby waives the Subject Default
through October 30, 2009; provided that in
consideration for such waiver and the other waiver and consent
contained in this Amendment, if the 2009 Convertible Debt is
issued, the Notes shall be prepaid in accordance with
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paragraph 4B(1) of the
Note
