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EXHIBIT 4.4
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (herein called this
"Amendment") made as of the ____ day of August, 1998 by and between Gulfport
Energy Corporation, a Delaware corporation, formerly known as WRT Energy
Corporation, a Delaware corporation ("Borrower"), and ING (U.S.) Capital
Corporation, a Delaware corporation ("Lender"),
W I T N E S S E T H:
WHEREAS, Borrower and Lender have entered into that certain Credit
Agreement dated as of July 10, 1997 (as amended, supplemented, or restated, the
"Original Agreement"), for the purposes and consideration therein expressed,
pursuant to which Lender made loans to Borrower as therein provided; and
WHEREAS, Borrower and Lender desire to amend the Original Agreement
as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Original Agreement, in
consideration of the loans which may hereafter be made by Lender to Borrower,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto do hereby agree as follows:
ARTICLE I.
Definitions and References
Section 1.1 Terms Defined in the Original Agreement; Exhibits.
Unless the context otherwise requires or unless otherwise expressly defined
herein, the terms defined in the Original Agreement shall have the same meanings
whenever used in this Amendment. All Exhibits attached to this Amendment are a
part hereof for all purposes.
Section 1.2. Other Defined Terms. Unless the context otherwise
requires, the following terms when used in this Amendment shall have the
meanings assigned to them in this Section 1.2.
"Amendment" means this First Amendment to Credit Agreement.
"Amendment Documents" means this Amendment, the
Subordination Agreement, and the Warrant Agreement.
"Credit Agreement" means the Original Agreement as amended
hereby.
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"Napoleonville Field" means the oil, gas and/or other mineral
properties and/or mineral rights located in Assumption Parish, Louisiana
which are described in Exhibit B attached hereto.
"Napoleonville Sale Agreement" means that certain Sale Agreement
dated as of August 12, 1998 among Borrower and Plymouth Resource Group
1998, L.L.C. relating to the sale of the Napoleonville Field, which is
attached hereto as Exhibit C.
"Original Note" means that certain Promissory Note dated July 10,
1997 and payable to the order of Lender in the original principal amount
of $15,000,000.
"Outstanding DLB Receivable" means the sum of $1,581,208.94 plus all
interest thereon whether accrued before or after the date hereof, which is
the amount of all outstanding indebtedness owing pursuant to the
Administrative Services Agreement as of the date hereof.
"Private Placement" means a private placement of Borrower's shares
of Common Stock, par value $0.01, in an aggregate amount of at least
$7,500,000.
"Rights Offering" means a registered public offering of Borrower's
shares of Common Stock, par value $0.01, in an aggregate amount of at
least $7,500,000.
"Shareholder Line of Credit" means that certain line of credit
agreement of even date herewith among Borrower, CD Holding Company L.L.C.,
Liddell Holdings Company, L.L.C., Liddell Investments, L.L.C., Wexford
Special Situations 1996, L.P., Wexford Special Situations 1996
Institutional, L.P., Wexford Special Situations 1996, Limited,
Wexford-Euris Special Situations 1996, L.P., Wexford Spectrum Investors,
L.L.C., Wexford Capital Partners II, L.P., and Wexford Overseas Partners
I, L.P., and the related promissory note in the amount of $3,000,000,
copies of which are attached here to as Exhibit D.
"Subordination Agreement" means the Subordination Agreement executed
by DLB Equities, L.L.C., an Oklahoma limited liability company, and each
of the Shareholders (as defined in the Shareholder Line of Credit), which
is attached hereto as Exhibit E.
"Tri-C" means Tri-C Resources, Inc., a Texas corporation.
"Tri-C Contract Area" means the "Contract Area" as such term is
defined in the Tri-C Farmout Agreement.
"Tri-C Earned Interests" means that portion or those portions of the
Tri-C Contract Area which Tri-C is or may from time to time become
entitled to receive by way of assignment from Borrower pursuant to the
terms and conditions of the Farmout Agreement.
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"Tri-C Farmout Agreement" means that certain Option/Farmout
Agreement dated March 28, 1998, by Borrower, as farmor, and Tri-C, as
farmee, affecting Borrower's leasehold interests in various tracts in the
West Xxxx Xxxxxxx Bay Field, which is attached hereto as Exhibit A.
"Warrant Agreement" means the Warrant Agreement executed by
Borrower, which is attached hereto as Exhibit F.
ARTICLE II.
Amendments and Waivers
Section 2.1. Negative Covenants. Section 5.2(n) of the Original Agreement
is hereby deleted in its entirety. Lender hereby waives any violations of the
Credit Agreement which have been asserted by Lender pursuant to that (i) certain
letter dated as of May 19, 1998 from Lender to Borrower and (ii) that certain
letter dated as of May 26, 1998 from Lender to Borrower (collectively, the
"Letters"), provided that such waiver shall not apply to any violations of the
covenants and provisions referred to in the Letters which may occur at any times
other than the times specified in the Letters. Borrower hereby waives and
releases Lender from any and all claims or liability of any kind whatsoever
arising out of or relating to the Letters or the matters addressed therein.
Section 2.2. Interest. The definition in the Original Note of "Fixed Rate
Payment Date", which heretofore read as follows:
" 'Fixed Rate Payment Date' means, with respect to any Fixed Rate
Portion: (i) the day on which the related Interest Period ends and (ii)
any day on which past due interest or past due principal is owed hereunder
with respect to such Fixed Rate Portion and is unpaid. If the terms hereof
or of the Credit Agreement provide that payments of interest or principal
with respect to such Fixed Rate Portion shall be deferred from one Fixed
Rate Payment Date to another day, such other day shall also be a Fixed
Rate Payment Date."
is hereby amended in its entirety to read as follows:
" 'Fixed Rate Payment Date' means, with respect to any Fixed Rate
Portion: (i) the day on which the related Interest Period ends, (ii) the
last day of each calendar month, beginning August 31, 1998, and (iii) any
day on which past due interest or past due principal is owed hereunder
with respect to such Fixed Rate Portion and is unpaid. If the terms hereof
or of the Credit Agreement provide that payments of interest or principal
with respect to such Fixed Rate Portion shall be deferred from one Fixed
Rate Payment Date to another day, such other day shall also be a Fixed
Rate Payment Date."
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Section 2.3. Rights Offering and Private Placement.
(a) Notwithstanding the provisions of Section 2.7(b) of the Credit
Agreement requiring Borrower to immediately prepay the Loan in the amount of any
cash proceeds (net of expenses) received by Borrower from the Rights Offering or
the Private Placement, Lender hereby consents to the Rights Offering and the
Private Placement (subject to subparagraph (b) below) and agrees to the
application of the cash proceeds (net of expenses) as follows:
(i) first, Borrower shall apply such proceeds to the payment in
full of all obligations owing under the Shareholder Line of Credit;
(ii) then, Borrower shall apply such proceeds to the payment in
full of the Outstanding DLB Receivable; and
(iii) last, Borrower shall use the remainder of such proceeds
for drilling and other capital expenditures and for other working
capital purposes.
(b) Each of the following events shall constitute an Event of
Default under the Credit Agreement:
(i) Borrower fails to file a registration statement on Form S-1
relating to the Rights Offering (the "Registration Statement") with
the Securities and Exchange Commission on or before August 31, 1998;
(ii) the Securities and Exchange Commission fails to declare the
Registration Statement effective on or before October 31, 1998; or
(iii) the Rights Offering is not completed within thirty (30)
days of the date the Registration Statement is declared effective by
the Securities and Exchange Commission.
Notwithstanding the foregoing paragraph (b)(ii), if (and only if) the Securities
and Exchange Commission fails to declare the Registration Statement effective on
or before October 31, 1998, Borrower may in lieu of the Rights Offering complete
the Private Placement by November 30, 1998, in which event no Event of Default
shall be deemed to have occurred under such paragraph (b)(ii).
Section 2.4. Shareholder Line of Credit. Subject to the terms and
provisions of this Amendment, Lender hereby consents to the incurrence by
Borrower of Debt under the Shareholder Line of Credit and waives any violations
of the Loan Documents resulting therefrom; provided (i) that the Shareholder
Line of Credit must be subordinated to all Obligations owing to Lender under the
Credit Agreement pursuant to the Subordination Agreement, and (ii) that Borrower
must borrow $2,000,000 under the Shareholder Line of Credit on the date hereof
and immediately use such funds to prepay Borrower's principal payments to Lender
which are due on September 30, 1998 and December 31, 1998 pursuant to Section
2.8 of the Credit Agreement. Additional borrowings by Borrower under the
Shareholder Line of Credit may be used by Borrower for drilling and other
capital expenditures and for other working
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capital purposes. Borrower will not agree to any amendment of the Shareholder
Line of Credit or waive any of its rights thereunder without the prior written
consent of Lender.
Section 2.5. Tri-C Farmout Agreement.
(a) Subject to the terms and provisions of this Amendment, Lender hereby
consents to Borrower entering into the Tri-C Farmout Agreement and waives any
violations of the Loan Documents resulting therefrom; provided that such consent
in no way makes the prior rights of Lender subject to or junior to the rights of
Tri-C under the Tri-C Farmout Agreement. Borrower acknowledges and agrees that
all of Borrower's rights in and to the Tri-C Farmout Agreement constitute
"Collateral" under the Security Agreement and are subject to the terms of the
Security Agreement and that Lender, as secured party, may enforce Borrower's
rights under the Tri-C Farmout Agreement without assuming Borrower's obligations
thereunder.
(b) Upon Lender's receipt of (i) written notification from each of
Borrower and Tri-C that Tri-C has earned an assignment of Tri-C Earned Interests
under Paragraph 9(a) or (b) of the Tri-C Farmout Agreement, (ii) a copy of the
assignment by Borrower to Tri-C of such Tri-C Earned Interests in accordance
with the terms and conditions of the Tri-C Farmout Agreement, and (iii) any
additional information reasonably requested by Lender evidencing that Tri-C has
earned such Tri-C Earned Interest, Lender hereby agrees to execute an
appropriate instrument, in recordable form, that releases Lender's Liens insofar
and only insofar as the same burdens such Tri-C Earned Interests. The partial
release contemplated by this Section 2.5 with respect to the Tri-C Earned
Interests shall specifically exclude any interest of Borrower in the Tri-C
Earned Interests that is to be reserved or retained by Borrower under the terms
of the Tri-C Farmout Agreement. In all cases, the term "Tri-C Earned Interests"
shall not include such reserved or retained interests of Borrower. Borrower will
not agree to any amendment of the Tri-C Farmout Agreement or waive any of its
rights thereunder without the prior written consent of Lender.
Section 2.6. Napoleonville Field. Subject to the terms and provisions of
this Amendment, Lender hereby consents to Borrower selling the Napoleonville
Field pursuant to the terms and provisions of the Napoleonville Sale Agreement
and waives any violations of the Loan Documents resulting therefrom; provided
that Borrower shall immediately apply all proceeds of such sale to the
prepayment of principal pursuant to the mandatory prepayment provisions of
Section 2.7 of the Credit Agreement.
Section 2.7. Wellbore Farmout Agreement. Lender understands that Borrower
is currently in negotiations with Plymouth Resource Group 1998, L.L.C.
Resources, Inc. ("Plymouth") to farmout 15 wellbores in the West Xxxx Xxxxxxx
Bay Field in exchange for an earned working interest or a reversionary interest.
Lender will promptly review Borrower's proposed farmout agreement with Plymouth
and, if Plymouth and the terms of such farmout agreement are acceptable to
Lender (taking into account any changes proposed by Lender), Lender will, for no
additional consideration, hereafter consent to such farmout agreement in a
manner similar to Lender's consent herein to the Tri-C Farmout Agreement,
provided that Lender's consent (if any) shall be limited to 15 xxxxx only. If
Lender fails to give its consent within 21 Business Days after this Amendment
becomes effective, then Lender shall be entitled to receive only three-fourths
of the shares of stock otherwise issuable under the Warrant
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Agreement (i.e., 1 1/2% of Borrower's shares on a fully diluted basis, rather
than 2%), and Lender agrees that its rights under the Warrant Agreement are
agreed to be subject to the foregoing limitation. Such reduction in the number
of shares subject to the Warrant Agreement shall be Borrower's sole remedy if
Lender fails to approve such farmout agreement within such time period, and
Borrower agrees that Lender has no obligation to approve such farmout agreement
and may give or withhold its approval in its discretion.
ARTICLE III.
Conditions of Effectiveness
Section 3.1. Effective Date. This Amendment shall become effective as of
the date first above written when, and only when Lender shall have received all
of the following, which (except for the payments described in paragraph (h)
below) must be duly executed and delivered and in form, substance and date
satisfactory to Lender:
(a) This Amendment.
(b) The Subordination Agreement.
(c) The Warrant Agreement.
(d) A certificate of the President and Secretary of Borrower dated the
date of this Amendment (i) certifying that all of the representations and
warranties set forth in Article IV hereof are true and correct at and as of the
time of such effectiveness, (ii) certifying that attached thereto is a true and
complete copy of resolutions adopted by the Board of Directors of Borrower
authorizing the execution, delivery and performance of this Amendment and the
other Amendment Documents and certifying the names and true signatures of the
officers of Borrower authorized to sign this Amendment and the other Amendment
Documents, (iii) certifying that attached thereto is a true and complete copy of
the charter documents of Borrower, with all amendments thereto, certified by the
appropriate official of Borrower's state of organization and the bylaws of
Borrower, and (iv) certifying satisfaction of the conditions set out in
subsections (f), (g), (i), and (k) of Section 3.2 of the Credit Agreement.
(e) A written opinion of Xxxx Xxxxxxxx, Esq., general counsel for
Borrower, dated as of the date of this Amendment, addressed to Lender, to the
effect that this Amendment and the other Amendment Documents have been duly
authorized, executed and delivered by Borrower and that the Credit Agreement and
the other Amendment Documents constitute the legal, valid and binding
obligations of Borrower, enforceable in accordance with their terms (subject, as
to enforcement of remedies, to applicable bankruptcy, reorganization, insolvency
and similar laws and to general principles of equity).
(f) Such supporting documents as Agent may reasonably request.
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(g) A written agreement wherein Tri-C shall agree that Borrower's rights
in and to the Tri-C Farmout Agreement are transferable and assignable to Lender
and Lender is acknowledged to be a third party beneficiary to the Tri-C Farmout
Agreement.
(h) Borrower shall have (i) paid Lender the amount of $53,000 in
immediately available funds for application to accrued and estimated outside
legal and engineering fees and expenses and (ii) paid to Lender for its own
account the amount of $2,000,000 in accordance with the provisions of Section
2.4 hereof.
ARTICLE IV.
Representations and Warranties
Section 4.1. Representations and Warranties of Borrower. In order to
induce Lender to enter into this Amendment, Borrower represents and warrants to
Lender that:
(a) The representations and warranties contained in Section 4.1 of the
Original Agreement are true and correct at and as of the time of the
effectiveness hereof as if made at such time.
(b) Borrower is duly authorized to execute and deliver this Amendment and
the other Amendment Documents and is and will continue to be duly authorized to
perform its obligations under the Credit Agreement. Borrower has duly taken all
corporate action necessary to authorize the execution and delivery of this
Amendment and the other Amendment Documents and to authorize the performance of
the obligations of Borrower hereunder and thereunder.
(c) The execution and delivery by Borrower of this Amendment and the other
Amendment Documents, the performance by Borrower of its obligations hereunder
and thereunder and the consummation of the transactions contemplated hereby and
thereby do not and will not conflict with any provision of law, statute, rule or
regulation or of the certificate of incorporation and bylaws of Borrower, or of
any material agreement, judgment, license, order or permit applicable to or
binding upon Borrower, or result in the creation of any lien, charge or
encumbrance upon any assets or properties of Borrower. Except for those which
have been duly obtained, no consent, approval, authorization or order of any
court or governmental authority or third party is required in connection with
the execution and delivery by Borrower of this Amendment and the other Amendment
Documents or to consummate the transactions contemplated hereby and thereby.
(d) When duly executed and delivered, each of this Amendment, the Credit
Agreement and the other Amendment Documents will be a legal and binding
instrument and agreement of Borrower, enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency and similar laws applying to
creditors' rights generally and by principles of equity applying to creditors'
rights generally.
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(e) The audited annual Consolidated financial statements of Borrower dated
as of December 31, 1997 and the unaudited quarterly Consolidated financial
statements of Borrower dated as of June 30, 1998 fairly present the Consolidated
financial position at such dates and the Consolidated statement of operations
and the changes in Consolidated financial position for the periods ending on
such dates for Borrower. Copies of such financial statements have heretofore
been delivered to Lender. Since June 30, 1998, no material adverse change has
occurred in the financial condition or businesses or in the Consolidated
financial condition or businesses of Borrower.
ARTICLE V.
Miscellaneous
Section 5.1. Ratification of Agreements. The Original Agreement as hereby
amended is hereby ratified and confirmed in all respects. The Loan Documents, as
they may be amended or affected by the various Amendment Documents, are hereby
ratified and confirmed in all respects. Any reference to the Credit Agreement in
any Loan Document shall be deemed to refer to this Amendment also, and any
reference in any Loan Document to any other document or instrument amended,
renewed, extended or otherwise affected by any Amendment Document shall also
refer to such Amendment Document. The execution, delivery and effectiveness of
this Amendment and the other Amendment Documents shall not, except as expressly
provided herein or therein, operate as a waiver of any right, power or remedy of
Lender under the Credit Agreement or any other Loan Document nor constitute a
waiver of any provision of the Credit Agreement or any other Loan Document.
Section 5.2. Survival of Agreements. All representations, warranties,
covenants and agreements of Borrower herein shall survive the execution and
delivery of this Amendment and the performance hereof, including without
limitation the making or granting of the Loan, and shall further survive until
all of the Obligations are paid in full. All statements and agreements contained
in any certificate or instrument delivered by Borrower hereunder or under the
Credit Agreement to Lender shall be deemed to constitute representations and
warranties by, or agreements and covenants of, Borrower under this Amendment and
under the Credit Agreement.
Section 5.3. Amendment Fee. In consideration of Lender's entering into
this Amendment, Borrower will pay to Lender a delayed amendment fee in the
amount of $250,000, payable on July 11, 1999; provided that if all Obligations
other than such fee owing pursuant to the Credit Agreement and all other Loan
Documents have been paid in full on or before July 10, 1999, such amendment fee
shall be permanently waived and need not be paid and all of Borrower's
obligations pursuant to this Section 5.3 shall be terminated.
Section 5.4. Warrants. In consideration of Lender's entering into this
Amendment, Borrower will issue to Lender the Warrants.
Section 5.5. Release of Liens. Borrower hereby covenants and agrees to pay
to Lender in cash the value of all Liens filed by Production Management
Corporation against the assets of any
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Related Person, including but not limited to the Liens listed in Exhibit G,
which have not been released by the earliest of (i) the date which is ten (10)
days following the date on which the Rights Offering is completed, (ii) forty
(40) days after the registration statement relating to the Rights Offering is
declared effective by the Securities and Exchange Commission, or (iii) November
30, 1998.
Section 5.6. Loan Documents. This Amendment and the other Amendment
Documents are each a Loan Document, and all provisions in the Credit Agreement
pertaining to Loan Documents apply hereto and thereto.
Section 5.7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York and any
applicable laws of the United States of America in all respects, including
construction, validity and performance.
Section 5.8. Counterparts. This Amendment may be separately executed in
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Amendment.
THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.
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IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
GULFPORT ENERGY CORPORATION
By:
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Xxxx Xxxxxxx
President
ING (U.S.) CAPITAL CORPORATION
By:
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Xxxxx X. Xxxxxxx
Senior Vice President
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