SCHEDULE 13D
CUSIP NO. 40274P109
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. 4)*
GulfWest Energy Inc.
(Name of Issuer)
Class A Common Stock, $0.001 Par Value Per Share
(Title of Class of Securities)
40274P109
(CUSIP Number)
_________
J. Virgil Waggoner OCM GW Holdings, LLC
6605 Cypresswood Drive, Suite 250 333 South Grand Avenue, 28th Floor
Spring, Texas 77379 Los Angeles California 90071
--------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person(s)
Authorized to Receive Notices and Communications)
February 28, 2005
------------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[ ] .
Note. Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
Continued on following page(s)
Page 1 of 17 Pages
1
CUSIP NO. 40274P109
======================================================================================================================
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
J. Virgil Waggoner
----------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[X]
----------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
----------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
----------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
----------------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0 shares
SHARES
-------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 16,725,943
OWNED BY
EACH
REPORTING
-------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER: 0 shares
WITH
-------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 16,725,943 shares
----------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,725,943 shares
----------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
----------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
62.04% (1) (2)
----------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
======================================================================================================================
(1) Based upon 19,779,319 shares of Common Stock outstanding, in addition to
7,180,714 shares of Common Stock which may be received upon conversion of
securities beneficially owned (or which may be deemed beneficially owned) by the
reporting person (See Item 5).
(2) After the Termination Date (as defined below), the reporting person may be
deemed to have sole voting and dispositive power with respect to 12,440,229
shares of Common Stock currently owned or issuable upon conversion of securities
other than the Series H Convertible Preferred Stock.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
CUSIP NO. 40274P109
======================================================================================================================
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
OCM GW Holdings, LLC
----------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[X]
----------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
----------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
----------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
----------------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0 shares
SHARES
-------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 62,194,197 shares
OWNED BY
EACH
REPORTING
-------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER: 0 shares
WITH
-------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
----------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
85.87% (1) (2)
----------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
======================================================================================================================
(1) Based upon 19,779,319 shares of Common Stock outstanding, in addition to
52,648,968 shares of Common Stock which may be received upon conversion of
securities beneficially owned (or which may be deemed beneficially owned) by the
reporting person (See Item 5).
(2) Excluding parties to the Omnibus and Release Agreement (as defined in Item
6) and other agreements described herein but not Mr. Waggoner.
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
CUSIP NO. 40274P109
======================================================================================================================
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
OCM Principal Opportunities Fund III, L.P.
----------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[X]
----------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable
----------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
----------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
----------------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0 shares
SHARES
-------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 62,194,197 shares
OWNED BY
EACH
REPORTING
-------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER: 0 shares
WITH
-------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
----------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
85.87% (1) (2)
----------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
PN
======================================================================================================================
(1) Based upon 19,779,319 shares of Common Stock outstanding, in addition to
52,648,968 shares of Common Stock which may be received upon conversion of
securities beneficially owned (or which may be deemed beneficially owned) by the
reporting person (See Item 5).
(2) Excluding parties to the Omnibus and Release Agreement (as defined in Item
6) and other agreements described herein but not Mr. Waggoner.
4
CUSIP NO. 40274P109
======================================================================================================================
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
OCM Principal Opportunities Fund III GP, LLC
----------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[X]
----------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable
----------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
----------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
----------------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0 shares
SHARES
-------- ----------------------------------------------------------
-------- ----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 62,194,197 shares
OWNED BY
EACH
REPORTING
-------- ----------------------------------------------------------
-------- ----------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER: 0 shares
WITH
-------- ----------------------------------------------------------
-------- ----------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
----------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
85.87% (1) (2)
----------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
OO
======================================================================================================================
(1) Based upon 19,779,319 shares of Common Stock outstanding, in addition to
52,648,968 shares of Common Stock which may be received upon conversion of
securities beneficially owned (or which may be deemed beneficially owned) by the
reporting person (See Item 5).
(2) Excluding parties to the Omnibus and Release Agreement (as defined in Item
6) and other agreements described herein but not Mr. Waggoner.
5
CUSIP NO. 40274P109
======================================================================================================================
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Oaktree Capital Management, LLC
----------------------------------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)[ ]
(b)[X]
----------------------------------------------------------------------------------------------------------------------
3 SEC USE ONLY
----------------------------------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
Not applicable
----------------------------------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS [ ]
IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
----------------------------------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
----------------------------------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER: 0 shares
SHARES
-------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER: 62,194,197 shares
OWNED BY
EACH
REPORTING
-------------------------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER: 0 shares
WITH
-------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER: 62,194,197shares
----------------------------------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
62,194,197 shares
----------------------------------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
----------------------------------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
85.87% (1) (2)
----------------------------------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IA; OO
======================================================================================================================
(1) Based upon 19,779,319 shares of Common Stock outstanding, in addition to
52,648,968 shares of Common Stock which may be received upon conversion of
securities beneficially owned (or which may be deemed beneficially owned) by the
reporting person (See Item 5).
(2) Excluding parties to the Omnibus and Release Agreement (as defined in Item
6) and other agreements described herein but not Mr. Waggoner.
6
CUSIP NO. 40274P109
Item 1. Security and Issuer
This statement relates to the Class A Common Stock, par value $.01 per
share (the "Common Stock"), of GulfWest Energy Inc., a Texas corporation (the
"Company"), which has its principal executive offices at 480 N. Sam Houston
Parkway E., Suite 300, Houston, Texas 77060.
Item 2. Identity and Background
a. J. Virgil Waggoner
J. Virgil Waggoner ("Waggoner") is a natural person whose principal
business office of Waggoner is 6605 Cypresswood Drive, Suite 250, Spring, Texas
77379. Waggoner is a United States citizen. Waggoner is a director of the
Company and is currently chief executive officer of JVW Investments, Ltd., a
private company. Waggoner has not been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to any
civil proceeding as a result of which he was subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violations with respect to such laws, during the last 5 years.
b. Oaktree Parties
OCM GW Holdings, LLC ("Holdings"), a Delaware limited liability
company, OCM Principal Opportunities Fund III, L.P., a Delaware limited
partnership ("OCM Fund"), OCM Principal Opportunities Fund III GP, LLC ("OCM
GP"), a Delaware limited liability company, and Oaktree Capital Management, LLC,
a California limited liability company ("Oaktree" and, collectively with
Holdings, OCM Fund and OCM GP, the "Oaktree Parties"; the Oaktree Parties and
Waggoner are referred to collectively as the "Filing Parties"), each has its
principal office at 333 South Grand Avenue, 28th Floor, Los Angeles, California
90071. The principal business of Oaktree is to provide investment advice and
management services to institutional and individual investors. OCM Fund
generally invests in securities and obligations of other entities over which
there is a potential for OCM Fund to exercise significant influence. OCM Fund is
the managing member of Holdings. OCM GP is the general partner of OCM Fund.
Oaktree is the managing member of OCM GP.
None of the Oaktree Parties have been convicted in a criminal
proceeding or been a party to any civil proceeding as a result of which it was
subject to a judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state securities laws
or finding any violations with respect to such laws, during the last 5 years.
The controlling members and executive officers of the Oaktree Parties
are listed below. The address of the principal business office of each
controlling member and executive officer is 333 South Grand Avenue, 28th Floor,
Los Angeles, California 90071.
Executive Officers & Controlling Members
----------------------------------------
Howard S. Marks Chairman and Principal
Bruce A. Karsh President and Principal
Russel S. Bernard Principal
Kevin L. Clayton Principal
John B. Frank Principal and General Counsel
Stephen A. Kaplan Principal
Larry W. Keele Principal
David Kirchheimer Principal and Chief Financial and Administrative Officer
David Richard Masson Principal
John W. Moon Principal
Sheldon M. Stone Principal
Portfolio Managers
------------------
Stephen A. Kaplan Principal
Ronald Beck Managing Director
7
CUSIP NO. 40274P109
To the best of the Oaktree Parties' knowledge, each controlling member
and executive officer of an Oaktree Party is a United States citizen and none of
the Oaktree Parties' respective controlling members and executive officers have,
during the last 5 years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or been a party to any civil
proceeding as a result of which he was subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violations with
respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
See Item 4 for a description of the Subscription Agreements and the
purchase by Holdings of the Company's securities. The Oaktree Parties did not
pay any additional consideration to Waggoner or any other party in connection
with the execution of any of the other agreements described in Item 6.
Item 4. Purpose of Transaction
(a) (b) Pursuant to a Subscription Agreement dated February 28, 2005
(the "Series G Subscription Agreement"), between Holdings and the Company,
Holdings purchased 81,000 shares of Series G Convertible Preferred Stock, par
value $0.01 per share, of the Company (the "Series G Preferred Stock") for a
purchase price of $40,500,000. Pursuant to a Subscription Agreement dated
February 28, 2005 (the "Series A Subscription Agreement"), between Holdings and
GulfWest Oil & Gas Company, a wholly owned subsidiary of the Company, Holdings
purchased 2,000 shares of the subsidiary's Series A Cumulative Exchangeable
Preferred Stock, par value $0.01 per share ("Series A Preferred Stock") for a
purchase price of $1,500,000.
Pursuant to a Subscription Agreement dated February 28, 2005 (the
"Second Series G Subscription Agreement" and collectively with the Series G
Subscription Agreement and Series A Subscription Agreement, the "Subscription
Agreements"), Holdings sold 4,300 shares of Series G Preferred Stock at a price
of $500 a share, the same price at which Holdings acquired the shares, to a
limited number of individuals consisting of management and related or affiliated
parties. Allan D. Keel, Chief Executive Officer and President of the Company, is
subject to restrictions on transfers of his shares of Series G Preferred Stock
for a period of 2 years. Allan D. Keel and the other purchasers of Series G
Preferred Stock are subject to a right of first offer in favor of Holdings, but
not with respect to shares of Common Stock received upon conversion, and are
required to convert their shares to Common Stock when Holdings and its
affiliates convert their shares into Common Stock in the same proportion as
Holdings and its affiliates.
The description contained in this Item 4 of the transactions
contemplated by the Subscription Agreements is qualified in its entirety by
reference to the full text of the Subscription Agreements, which are
incorporated herein by reference and filed as Exhibit 99(a), 99(b) and 99(c)
hereto.
(c) Not applicable.
(d) Effective at the closing of the transactions contemplated by the
Subscription Agreements, Scott Manolis, Marshall Smith and Thomas Kaetzer
resigned as members of the Company's board of directors. Waggoner and John Loehr
remained as directors of the Company and B. James Ford, Skardon F. Baker and
Allan D. Keel were elected to fill the vacancies resulting from the resignation
of such three directors. Under the terms of the Statement of Resolution
governing the Series G Preferred Stock, the holders of that series have the
right to elect a majority of the Company's board of directors.
8
CUSIP NO. 40274P109
(e) The newly authorized Series G Preferred Stock purchased by Holdings
ranks junior to the authorized and outstanding Cumulative Convertible Preferred
Stock, Series F, of the Company (the "Series F Preferred Stock") as to dividends
and liquidation, but senior to all other classes of capital stock of the
Company. The Statement of Resolution governing the Series A Preferred Stock was
amended to require the holders of the Series A Preferred Stock to exchange all
their shares for either approximately 1,429 shares of Common Stock per share of
Series A Preferred Stock or for one share of the newly authorized Series H
Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Series H Preferred Stock") per share of Series A Preferred Stock. The Series H
Preferred Stock is convertible into Common Stock at a conversion price of $0.35
a share and ranks junior to the Series G Preferred Stock as to dividends and
liquidation but senior to all other classes of preferred stock of the Company
other than the Series F Preferred Stock. If no election is made by a holder of
Series A Preferred Stock by March 15, 2005, such holder's shares of Series A
Preferred Stock will automatically be exchanged for Common Stock. Both Waggoner
and Holdings elected on February 28, 2005 to exchange their shares of Series A
Preferred Stock for Series H Preferred Stock. The Series D Preferred Stock, par
value $0.01 per share, which does not pay dividends, will remain of equal
priority with the Cumulative Convertible Preferred Stock, Series E, par value
$0.01 per share, of the Company (the "Series E Preferred Stock") as to
liquidation.
There has been no change to the Company's dividend policy,
although in connection with the transactions referred to above the terms of the
Series E Preferred Stock were amended to provide for a 6%, rather than $30,
annual dividend, expressed as a percentage of the stock's $500 liquidation value
plus accrued and unpaid dividends, payable quarterly. As amended, dividends on
the Series E Preferred Stock will accrue but not be paid until March 31, 2009,
at which time the Company will commence quarterly dividend payments. Deferred
dividends on the Series E Preferred Stock may be paid to the extent the board of
directors elects to do so or dividends on the Series G Preferred Stock are paid
for a quarter. Accrued dividends on the Series E Preferred Stock may be
converted to Common Stock at a conversion price of $0.90. Accrued and unpaid
deferred dividends are to be paid on liquidation or, at the Company's option,
with the consent of the holders affected, at any time.
The Series G Preferred Stock provides for an 8% cash dividend,
expressed as a percentage of the stock's $500 liquidation value plus accrued and
unpaid dividends, which will accrue but not be paid until the dividend owing
April 1, 2009 is required to be paid, at which time the Company will commence
quarterly dividend payments. Deferred dividends may be paid to the extent the
board of directors elects to do so. Accrued dividends on the Series G Preferred
Stock may be converted to Common Stock at a conversion price of $0.90. Accrued
and unpaid deferred dividends are to be paid on liquidation or, at the Company's
option, with the consent of the holders affected, at any time.
Holders of the newly authorized Series H Preferred Stock are
entitled to quarterly dividends of 10 shares of Common Stock per share of Series
H Preferred Stock, or 40 shares of Common Stock annually per shares of Series H
Preferred Stock.
Holders of both the Series G Preferred Stock and Series H
Preferred Stock vote on an as-converted basis with the holders of the Common
Stock.
(f) None.
(g) None.
9
CUSIP NO. 40274P109
(h) None.
(i) None.
(j) The Oaktree Parties currently hold their interest in the Company
for investment purposes. The Filing Parties intend to continuously evaluate the
Company's businesses and prospects, alternative investment opportunities and all
other factors deemed relevant in determining whether additional shares of the
Company's securities will be acquired by the Filing Parties or by other accounts
and investment funds of which Oaktree is the general partner and/or investment
manager or whether the Filing Parties or any such other accounts or investment
funds will dispose of shares of the Company's securities. At any time,
additional shares of securities of the Company may be acquired or some or all of
the shares of the Company's securities held by the Filing Parties may be sold,
in either case in the open market, in privately negotiated transactions or
otherwise. Except as otherwise disclosed herein, the Filing Parties currently
have no plan or proposal, beneficially or otherwise, which would be related to
or would result in any of the matters described in Items 4(a)-(j) of Schedule
13D; however, as part of their respective ongoing evaluation of this investment
and investment alternatives, the Filing Parties may consider such matters and,
subject to applicable law, may formulate a plan with respect to such matters,
and, from time to time, any Filing Party may hold discussions with or make
formal proposals to the management or the Board of Directors of the Company,
other shareholders of the Company or other third parties regarding such matters.
Item 5. Interest in Securities of Issuer
(a) and (b) Waggoner beneficially owns, and as a result of the Share
Transfer Restriction Agreement and Proxy (described in Item 6) may be deemed,
solely for the purpose of Rule 13d-3 of the Securities Exchange Act of 1934 (the
"Exchange Act"), to share with Holdings beneficial ownership and shared voting
and dispositive power for 16,725,943 shares of the Common Stock, which includes
9,545,229 shares of Common Stock, options to purchase 20,000 shares of Common
Stock, warrants to purchase 625,000 shares of Common Stock, 2,250,000 shares of
Common Stock issuable upon the conversion of 9,000 shares of the Series E
Preferred Stock, based upon a conversion price of $2.00, and 4,285,714 shares of
Common Stock issuable upon the conversion of 3,000 shares of Series H Preferred
Stock, based upon a conversion price of $0.35.
Waggoner's current beneficial ownership represents approximately 62.04%
of the shares of the Common Stock, based upon 19,779,319 shares of Common Stock
issued and outstanding as of February 28, 2005, plus the 7,180,714 shares of
Common Stock which may be received upon conversion of securities beneficially
owned by Waggoner. In addition, as dividends accrue on the Series E Preferred
Stock and are paid on the Series H Preferred Stock, Waggoner's beneficial
ownership of Common Stock will increase.
Holdings beneficially owns and has voting and dispositive power for
45,468,254 shares of the Common Stock, which includes 2,857,143 shares issuable
upon the conversion of 2,000 shares of Series H Preferred Stock, based upon a
conversion price of $.35, and 42,611,111 shares of Common Stock issuable upon
the conversion of 76,700 shares of Series G Preferred Stock, based upon a
conversion price of $0.90. In addition, as a result of the Share Transfer
Restriction Agreement and Proxy, Holdings may be deemed, solely for the purpose
of Rule 13d-3 of the Exchange Act, to share beneficial ownership with Waggoner
and to have shared dispositive and voting power with Waggoner with respect to
the 16,725,943 shares of Common Stock beneficially owned by Waggoner.
Holdings' current beneficial ownership may be deemed to represent
approximately 85.87% of the shares of the Common Stock, based upon 19,779,319
shares of Common Stock issued and outstanding as of February 28, 2005, plus
52,648,968 shares of Common Stock which may be received upon conversion of
securities beneficially owned (or which may be deemed beneficially owned) by
Holdings. In addition, as dividends accrue on the Series G Preferred Stock and
are paid on the Series H Preferred Stock, Holdings' beneficial ownership of
Common Stock will increase.
10
CUSIP NO. 40274P109
OCM Fund is the managing member of Holdings. OCM GP is the general
partner of OCM Fund. Oaktree is the managing member of OCM GP. By virtue of
their relationship to Holdings each of OCM Fund, OCM GP, Oaktree and the
individuals listed in Item 2(b) may be deemed to beneficially own and share
voting and dispositive power with respect to the shares held of record or
beneficially owned (or deemed beneficially owned) by Holdings, and therefore may
be deemed to share beneficial ownership with Holding's of approximately 85.87%
of the Common Stock solely for the purposes of Section 13d-3 of the Exchange
Act. Each of Waggoner, OCM GP, Oaktree and the individuals listed in Item 2(b)
disclaims beneficial ownership of the securities reported herein, except to the
extent of their respective pecuniary interest, and the filing of this Statement
shall not be construed as an admission that any such person is the beneficial
owner of any such securities.
Further, as of the date hereof, Bargus Partnership, Douglas Moreland
and Star-Tex Trading Co., shareholders of the Company, together with Waggoner
and Holdings, represent, to the best of the Filing Parties' knowledge, in the
aggregate 64,672,768 shares of Common Stock, or approximately 86.33% of the
Common Stock, based upon 19,779,319 shares of Common Stock issued and
outstanding as of February 28, 2005, plus 55,077,539 shares of Common Stock
which may be received upon conversion of securities beneficially owned (or which
may be deemed beneficially owned) by Waggoner and Holdings and the three parties
referred to above (which three parties executed the Omnibus and Release
Agreement, described in Item 6). In addition, the purchasers of the Series G
Preferred Stock pursuant to the Second Series G Subscription Agreement, together
with Holdings, represent, to the best of the Filing Parties' knowledge, in the
aggregate 64,583,086 shares of Common Stock, or approximately 86.32% of the
Common Stock, based upon 19,779,319 shares of Common Stock issued and
outstanding as of February 28, 2005, plus 55,037,857 shares of Common Stock
which may be received upon conversion of securities beneficially owned (or which
may be deemed beneficially owned) by Holdings and such purchasers.
The Filing Parties, together with certain other shareholders of the
Company referred to herein that are parties to the Omnibus and Release Agreement
or any other agreement described herein, may constitute a "group" for purposes
of Rule 13d-5 under the Exchange Act with respect to their respective beneficial
ownership of the shares of Common Stock at the time of the applicable event
requiring disclosure in this Schedule. Each Filing Party disclaims the existence
of a "group" and disclaims beneficial ownership of all shares of the Common
Stock other than any shares reported herein as being held of record by it. The
filing of this Schedule shall not constitute an admission that the Filing
Parties and such persons constitute a "group" for purposes of Rule 13d-5
promulgated under the Act.
(c) Except as set forth herein, to the knowledge of the Filing Parties,
with respect to the other persons named in response to paragraph (a), none of
the persons named in response to paragraph (a) has effected any transactions in
shares of the Common Stock during the past 60 days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to the Securities of the Issuer
Subscription Agreements
See Item 4 with respect to the Subscription Agreements. Copies of the
Subscription Agreements are attached hereto as Exhibit 99(a), 99(b) and 99(c).
Share Transfer Restriction Agreement and Irrevocable Proxy
11
CUSIP NO. 40274P109
Waggoner has entered into a Share Transfer Restriction Agreement, dated
February 28, 2005 (the "Share Transfer Restriction Agreement") with Holdings,
pursuant to which he agreed to deliver to Holdings an Irrevocable Proxy (the
"Proxy") coupled with an interest with respect to his shares of Common Stock,
Series E Preferred Stock and Series H Preferred Stock thereby allowing Holdings
to vote such shares at any time in favor of reincorporating the Company in
Delaware by merging the Company into a wholly owned Delaware subsidiary (the
"Merger") or, if the Merger is not consummated by December 31, 2005, in favor of
the conversion of certain of the Series G Preferred Stock into New Preferred
Stock (as defined below) (the first to occur being referred to as the
"Termination Date"). The proxy also grants Holdings a proxy with additional
rights with respect to the Series H Preferred Stock until such time as all the
Series H Preferred Stock has converted into Common Stock.
Waggoner, pursuant to the terms of the Share Transfer Restriction
Agreement, is subject to restrictions on the disposition or transfer of the
economic or voting rights of the capital stock owned by him, including
prohibitions on transfers of shares of capital stock or entering into any swap,
option, future, forward or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of any such capital stock, without
the consent of Holdings.
The Proxy and the restrictions on disposition in the Share Transfer
Restriction Agreement terminate upon the Termination Date, other than with
respect to the shares of Series H Preferred Stock held by Waggoner.
In addition, Waggoner agreed to exchange his shares of Series A
Preferred Stock for Series H Preferred Stock pursuant to the amended terms of
the Series A Preferred Stock Statement of Resolution and is required to convert
any shares of Series H Preferred Stock he owns into Common Stock in the same
proportion as that converted by Holdings or its affiliates.
The description contained in this Item 6 of the transactions
contemplated by the Share Transfer Restriction Agreement and form of Proxy are
qualified in their entirety by reference to the full text of the Share Transfer
Restriction Agreement and form of Proxy, both of which are incorporated herein
by reference and filed as Exhibit 99(d) hereto.
Shareholders Rights Agreement
Holdings and the Company have entered into a Shareholders Rights
Agreement (the "Shareholders Rights Agreement") dated February 28, 2005
providing Holdings with up to four demand registrations with respect to shares
of Series G Preferred Stock and Common Stock upon the request of holders holding
50% or more of the registrable securities on an as converted basis, and
unlimited piggyback registration rights.
Pursuant to the Shareholders Rights Agreement, Holdings is entitled to
receive monthly financial reports, an annual business plan and operating budget
of the Company, periodic filings and other information, in addition to board
observation rights. Further, the Shareholders Rights Agreement subjects the
Company to various restrictive covenants affecting operation of its business.
Under the Shareholders Rights Agreement Holdings has a right of first
refusal to purchase any additional securities proposed to be purchased by a
third party from the Company.
If the Merger does not occur by July 30, 2005, the Company is required
to make additional payments on the Series G Preferred Stock in the amount of $80
per share per annum until the Merger occurs or a number of shares of Series G
Preferred Stock are converted into a new series of Company preferred stock ("New
Preferred Stock") substantially similar to the Series G Preferred Stock except
that (i) it will not have the right to vote, (ii) it will be redeemable at the
holder's option on January 15, 2008, and if not redeemed the dividend will
increase to 14%, (iii) it will not be convertible, (iv) it will bear a quarterly
dividend at an annual rate of 12%, and (v) it will be optionally redeemable by
the Company at any time. The Company is required to use its best efforts to
convert certain of the shares of Series G Preferred Stock into New Preferred
Stock if the Merger has not occurred by December 31, 2005.
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CUSIP NO. 40274P109
The description contained in this Item 6 of the transactions
contemplated by the Shareholders Rights Agreement is qualified in its entirety
by reference to the full text of the Shareholders Rights Agreement, which is
incorporated herein by reference and filed as Exhibit 99(e) hereto.
Omnibus and Release Agreement
Pursuant to an Omnibus and Release Agreement ("Omnibus and Release
Agreement"), among Holdings, the Company and certain shareholders of the
Company, dated February 28, 2005, such shareholders are prohibited from,
directly or indirectly, entering into any swap, option, future, forward or other
similar agreement that transfers, in whole or in part, any of the economic
consequences of ownership of any Series H Preferred Stock or Common Stock,
although such holders may sell the Common Stock or, after February 28, 2007, the
Series H Preferred Stock. After February 28, 2007 Holdings and its affiliates
have a right of first refusal to acquire any Series H Preferred Stock if a third
party offers to acquire that stock, and the signatories to the Omnibus and
Release Agreement have piggyback registration rights with respect to shares of
Common Stock listed on Schedule I thereto or issued as a dividend on the Series
H Preferred Stock. Shareholders (other than Holdings) of the Company that are
party to the Omnibus and Release Agreement have agreed to vote in favor of the
Merger. The restrictions imposed upon the shareholders of the Company that have
executed the Omnibus and Release Agreement do not apply to shares of Common
Stock owned by these shareholders, whether received upon conversion of the
Series H Preferred Stock or otherwise, except as disclosed above.
The description contained in this Item 6 of the transactions
contemplated by the Omnibus and Release Agreement is qualified in its entirety
by reference to the full text of the Omnibus and Release Agreement, which is
incorporated herein by reference and filed as Exhibit 99(f) hereto.
Oaktree, as the investment manager of OCM Fund, receives a management
fee for managing the assets of OCM Fund. OCM GP, as the general partner of OCM
Fund, has a carried interest in OCM Fund.
Other than as described herein to the Filing Parties' knowledge, there
are no contracts, arrangements, understandings or relationships (legal or
otherwise) among the persons named in Item 2 and between such persons and any
person with respect to any securities of the Company including but not limited
to transfer or voting of any of the securities, finder's fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of profits, division of
profits or loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits
99(a) Subscription Agreement for the Series G Preferred Stock, dated
February 28, 2005, between Holdings and the Company
99(b) Subscription Agreement for the Series A Preferred Stock, dated
February 28, 2005, between Holdings and the Company
99(c) Subscription Agreement for the Series A Preferred Stock, dated
February 28, 2005, among Holdings and certain individuals
identified on the signature page thereto
99(d) Share Transfer Restriction Agreement, dated February 28, 2005,
between Holdings and J. Virgil Waggoner
99(e) Shareholders Rights Agreement, dated February 28, 2005,
between Holdings and the Company
13
CUSIP NO. 40274P109
99(f) Omnibus and Release Agreement, dated February 28, 2005, among
the Company, Holdings and certain of the shareholders of the
Company
99(g) Joint Filing Agreement, dated February 28, 2005, among the
Oaktree Parties and J. Virgil Waggoner
14
CUSIP NO. 40274P109
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief,
each of the undersigned certify that the information set forth in this Statement
is true, complete and correct.
Date: February 28, 2005
OCM GW HOLDINGS, LLC
By: OCM Principal Opportunities Fund III, L.P.,
its managing member
By: OCM Principal Opportunities Fund III GP, LLC,
its general partner
By: Oaktree Capital Management, LLC, its
managing member
By: /s/ Stephen A. Kaplan
---------------------------------------------
Name: Stephen A. Kaplan
Title: Principal
OCM PRINCIPAL OPPORTUNITIES FUND III, L.P.
By: OCM Principal Opportunities Fund III GP, LLC,
its general partner
By: Oaktree Capital Management, LLC, its managin
member
By: /s/ Stephen A. Kaplan
---------------------------------------------
Name: Stephen A. Kaplan
Title: Principal
15
CUSIP NO. 40274P109
OCM PRINCIPAL OPPORTUNITIES FUND III GP, LLC
By: Oaktree Capital Management, LLC, its managing
member
By: /s/ Stephen A. Kaplan
---------------------------------------------
Name: Stephen A. Kaplan
Title: Principal
OAKTREE CAPITAL MANAGEMENT, LLC
By: /s/ Stephen A. Kaplan
---------------------------------------------
Name: Stephen A. Kaplan
Title: Principal
16
CUSIP NO. 40274P109
/s/ J. Virgil Waggoner
---------------------------------------------
J. Virgil Waggoner
17
Exhibit Index
-------------
Name of Exhibit
---------------
99(a) Subscription Agreement for the Series G Preferred Stock, dated
February 28, 2005, between Holdings and the Company
99(b) Subscription Agreement for the Series A Preferred Stock, dated
February 28, 2005, between Holdings and the Company
99(c) Subscription Agreement for the Series A Preferred Stock, dated
February 28, 2005, between Holdings and certain individuals
identified on the signature page thereto
99(d) Share Transfer Restriction Agreement, dated February 28, 2005,
between Holdings and J. Virgil Waggoner
99(e) Shareholders Rights Agreement, dated February 28, 2005,
between Holdings and the Company
99(f) Omnibus and Release Agreement, dated February 28, 2005, among
the Company, Holdings and certain of the shareholders of the
Company
99(g) Joint Filing Agreement, dated February 28, 2005, among the
Oaktree Parties and J. Virgil Waggoner
1