Exhibit 10.4(c)
THIRD AMENDMENT TO LOAN AGREEMENT
This Third Amendment to Loan Agreement (this “Amendment”) dated as of
December 21, 2006, is made among GMX Resources Inc., an Oklahoma corporation
(the “Borrower”), Capital One, National Association, a national banking
association, as administrative agent (the “Agent”), and Union Bank of
California, N.A. and Capital One, National Association, as Banks (the “Banks”),
who agrees as follows:
RECITALS
A. This Third Amendment to Loan Agreement pertains to that certain Amended and
Restated Loan Agreement (Line of Credit) dated as of June 7, 2006, among the
Borrower, the Agent and the Banks, as amended by the First Amendment dated as of
August 4, 2006, and the Second Amendment dated as of August 14, 2006 (as
amended, the “Loan Agreement”). As used in this capitalized terms used herein
without definition herein shall have the meanings provided in the Loan
Agreement.
B. The Borrower, the Agent and the Banks desire to evidence changes to the
Borrowing Base and related provisions of the Loan Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions contained herein,
and the loans and extensions of credit heretofore, now or hereafter made to the
Borrower by the Banks, the parties hereto hereby agree as follows:
ARTICLE 1.
AMENDMENT AND AGREEMENT
1.1 The first sentence of the definition of “Amount” in Section 1.2 of the Loan
Agreement is hereby amended to change the dollar amount from $35,000,000.00 to
be fifty million ($50,000,000.00) dollars.
1.2 As of the effective date of this Amendment, the Borrowing Base is
$50,000,000.00.
1.3 As of the effective date of this Amendment, the Borrowing Base does not
include a Periodic Reduction. (The Borrower expressly acknowledges that nothing
in this Amendment shall be a precedent for future redeterminations of the
Borrowing Base nor a waiver of the provisions of Subsection 2.4(c) of the Loan
Agreement.)
1.4 The Borrower shall pay to the Banks in connection with this Amendment an
upfront commitment fee of one-quarter of one percent (0.25%) on the incremental
increased portion of the new Amount and Commitment Limit, equal to $37,500.00
(being 0.25% of the incremental increase of $15,000,000.00, payable in the
portions of $22,500.00 to Capital One and $15,000.00 to UBOC).

 

 

--------------------------------------------------------------------------------

 

1.5 Subsection 6.3(g) of the Loan Agreement is hereby amended and restated to
read in its entirety as follows:
The Borrower’s ownership of equity interest in Endeavor, and in Diamond,
provided that the total amount of the Borrower’s investment (both debt and
equity) in Diamond at any one time (i) shall not exceed a maximum limit of
twenty one million ($21,000,000.00) dollars until December 31, 2007, and on and
after December 31, 2007 shall not exceed a maximum limit of fifteen million
($15,000,000.00) dollars and (ii) shall not consist of more than 50% equity.
1.6 The Banks previously granted a waiver of the Borrower’s compliance with the
provisions of Subsection 6.3(g) of the Loan Agreement during the Borrower’s
fiscal quarter ended September 30, 2006, with respect to the debt owing by
Diamond to the Borrower. The Borrower expressly acknowledges that such waiver
shall not be a precedent for any subsequent request for a waiver of this or any
other covenant or other provision of the Loan Agreement.
ARTICLE 2.
ACKNOWLEDGMENT OF COLLATERAL
2.1 The Borrower hereby specifically reaffirms all of the Collateral Documents.
The Borrower hereby confirms and agrees that the Collateral Documents secure the
Loan Agreement as amended by this Amendment.
ARTICLE 3.
MISCELLANEOUS
3.1 The Borrower represents and warrants to the Agent and the Banks (which
representations and warranties will survive the execution of this Amendment)
that (i) all representations and warranties contained in the Loan Agreement and
the Collateral Documents are true and correct on and as of the date hereof as
though made on and as of such date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such earlier date, (ii) no event has occurred and is continuing as of the date
hereof which constitutes a Default or Event of Default, (iii) there has not
occurred any material adverse change in the Collateral or other assets,
liabilities, financial condition, business operations, affairs or circumstances
of the Borrower and the Subsidiaries taken as a whole or any other facts,
circumstances or conditions (financial or otherwise) upon which a Bank has
relied or utilized in making its decision to enter into this Amendment, and
(iv) there is no defense, offset, compensation, counterclaim or reconventional
demand with respect to amounts due under, or performance of, the terms of the
Notes and the Loan Agreement. To the extent any such defense, offset,
compensation, counterclaim or reconventional demand or other causes of action by
the Borrower against the Agent or any Bank might exist, whether known or
unknown, such items are hereby waived by the Borrower.

 

- 2 -

--------------------------------------------------------------------------------

 

3.2 Except as expressly modified by this Amendment, all terms and provisions of
the Loan Agreement are hereby ratified and confirmed and shall be and shall
remain in full force and effect, enforceable in accordance with its terms.
3.3 Borrower agrees to pay on demand all costs and expenses of the Agent and the
Banks in connection with the preparation, reproduction, execution and delivery
of this Amendment and the other instruments and documents to be delivered
hereunder (including the reasonable fees and expenses of counsel for the Agent).
In addition, Borrower shall pay any and all stamp or other taxes, recordation
fees and other fees payable in connection with the execution, delivery, filing
or recording of this Amendment and the other instruments and documents to be
delivered hereunder and agrees to hold Agent and the Banks harmless from and
against any all liabilities with respect to or resulting from any delay or
omission in paying such taxes or fees.
3.4 This Amendment may be executed in multiple separate counterparts, and it
shall not be necessary that the signatures of all parties hereto be contained on
any one counterpart hereof; each party’s signature may appear on a separate
counterpart but all such counterpart taken together shall constitute one and the
same instrument. The parties specifically confirm their intent to be bound by
delivery of such signed counterparts by telecopier.
3.5 The provisions of this Amendment shall become effective if and when, and
only when, (i) each and every representation and warranty of Borrower contained
in this Amendment is true, complete and accurate, (ii) no event exists which
constitutes a Default, (iii) the payment by the Borrower of the fee under
paragraph 1.4 of this Amendment, and (iv) the receipt by the Agent of a duly
executed counterpart of this Amendment. The Borrower hereby certifies by
execution of this Amendment that the foregoing conditions (i) and (ii) are
satisfied and true and correct.

 

- 3 -

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed as of the date first above written.

                      BORROWER:   GMX RESOURCES INC.    
 
               
 
      By:   /s/ Ken L. Kenworthy
 
            Name: Ken L. Kenworthy, Sr.             Title: Executive Vice
President and CFO    
 
                    AGENT:   CAPITAL ONE, NATIONAL ASSOCIATION    
 
               
 
      By:   /s/ Paul Hein
 
            Name: Paul Hein             Title: Vice President    
 
                    BANKS:   CAPITAL ONE, NATIONAL ASSOCIATION,             as a
Bank    
 
               
 
      By:   /s/ Paul Hein
 
            Name: Paul Hein             Title: Vice President    
 
                        UNION BANK OF CALIFORNIA, N.A.    
 
               
 
      By:   /s/ Jarrod Bourgeois
 
            Name: Jarrod Bourgeois             Title: Vice President    

 

- 4 -