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EXHIBIT 10.28
TENTH AMENDMENT TO CREDIT AGREEMENT
THIS TENTH AMENDMENT TO CREDIT AGREEMENT is made and entered into
effective as of this 18th day of March, 1997 (this "Amendment") among THE GNI
GROUP, INC., a Delaware corporation ("GNI"), DISPOSAL SYSTEMS, INC., a Delaware
corporation ("DSI"), RESOURCE TRANSPORTATION SERVICES, INC., a Delaware
corporation ("RTS"), GNI CHEMICALS CORPORATION, a Delaware corporation ("GNIC")
and DISPOSAL SYSTEMS OF CORPUS CHRISTI, INC., a Delaware corporation ("Corpus")
(GNI, RTS, GNIC, DSI and Corpus being, collectively, the "Loan Parties"), the
address for each for purposes hereof being 0000 Xxxxxxxxxxxx Xxxx, X.X. Xxx
000, Xxxx Xxxx, Xxxxx 00000-0000 and NATIONSBANK OF TEXAS, N.A., a national
banking association (the "Lender"), formerly known as NCNB TEXAS NATIONAL BANK,
the address for purposes hereof being 700 Louisiana, X.X. Xxx 0000, Xxxxxxx,
Xxxxx 00000-0000.
W I T N E S S E T H
WHEREAS, GNI, DSI, RTS, GNIC and the Lender entered into that certain
Credit Agreement dated as of June 30, 1993 as amended by Amendment No. 1 dated
as of March 15, 1994, Second Amendment to Credit Agreement dated as of August
31, 1994, and Third Amendment to Credit Agreement dated as of December 31,
1994, and the Loan Parties and the Lender entered into that certain Fourth
Amendment to Credit Agreement dated as of March 3, 1995, that certain Fifth
Amendment to Credit Agreement dated as of March 31, 1995, that certain Sixth
Amendment to Credit Agreement dated as of November 3, 1995, that certain
Seventh Amendment to Credit Agreement dated as of September 23, 1996, that
certain Eighth Amendment to Credit Agreement dated as of December 31, 1996 and
that certain Ninth Amendment to Credit Agreement dated as of December 31, 1996
(collectively, the "Credit Agreement"), pursuant to which the Lender agreed to
make certain loans and issue letters of credit to the Loan Parties; and
WHEREAS, the Loan Parties have decided to amend the Credit Agreement;
and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration and the mutual benefits, covenants and agreements herein
expressed, the Loan Parties and the Lender now agree to amend the Credit
Agreement as follows:
1. All capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
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2. The definitions of "Agreement", "Facility B Commitment" and
"Note B" in Section 1.02 of the Credit Agreement is hereby amended in their
entirety to hereafter read as follows:
"Agreement" shall mean this Credit Agreement and all exhibits and
schedules hereto, as amended by Amendment No. 1 dated as of March 15,
1994, the Second Amendment to Credit Agreement dated as of August 31,
1994, the Third Amendment to Credit Agreement dated December 31, 1994,
the Fourth Amendment dated as of March 3, 1995, the Fifth Amendment
dated as of March 31, 1995, the Sixth Amendment dated as of November 3,
1995, the Seventh Amendment dated as of September 23, 1996, the Eighth
Amendment dated as of December 31, 1996 and the Ninth Amendment dated
as of December 31, 1996, and the Tenth Amendment dated as of March 18,
1997, as the same may from time to time be amended or supplemented.
"Facility B Commitment" shall mean the aggregate amount of
$15,000,000, less reductions pursuant to Section 5.03.
"Note B" shall mean that certain promissory note dated March 18,
1997 in the face amount of $15,000,000, executed by GNI, payable to the
order of the Lender and in substantially the form attached as Exhibit A
to the Tenth Amendment, together with deferrals, renewals, extensions or
rearrangements thereof, which is a renewal and rearrangement but not
novation of the existing Note B.
3. Section 1.02 of the Credit Agreement is further amended by adding
the following definition where appropriate:
"Tenth Amendment" shall mean the Tenth Amendment to Credit
Agreement dated as of March 18, 1997 among the Loan Parties and the
Lender.
4. The Lender and the Loan Parties agree that Facility B will no
longer be governed by or subject to the Borrowing Base. For purposes of
Article IV of the Credit Agreement, the Borrowing Base shall equal the Facility
B Commitment and there will no longer be a monthly redetermination of the
Borrowing Base under Section 4.04. GNI will, however, continue to provide the
information required by Section 4.04.
5 Section 8.27 of the Credit Agreement is hereby amended by
changing the last sentence thereof to read as follows:
"Upon the acquisition or formation of a Subsidiary with material assets,
GNI shall cause such Subsidiary to become a Loan Party and a guarantor
of the Obligations."
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6. Section 8.28 of the Credit Agreement is hereby deleted in its
entirety, and the following is substituted therefor:
"Section 8.28 Cash Flow Leverage Ratio. Beginning as of March
31, 1997, maintain, as of the close of each calendar quarter for the
twelve-month period ending on such date, a ratio of Total Senior Funded
Debt to EBITDA no greater than 2.0 to 1.0. For the purposes of this
Section 8.28, prior to June 30, 1997, the calculation of EBITDA shall be
annualized as follows: for the six-month period ending December 31,
1996, such amounts shall be multiplied times two, and for nine-month
period ending March 31, 1997, such amounts shall be multiplied by 1 1/3."
7. Section 9.11 of the Credit Agreement is hereby amended by
changing $3,000,000 in clause (f) to $4,000,000 and adding the following clause
(k):
"(k) purchase of assets by GNIC in an amount up to $4,500,000 from
Xxxxxxx Chemical Company or its affiliates."
8. This Amendment shall become binding on the Lender when, and only
when, the Lender shall have received each of the following in form and
substance satisfactory to the Lender or its counsel:
(a) counterparts of this Amendment executed by the Loan
Parties and the Lender and Note B duly issued by GNI to the Lender;
(b) copies of corporate resolutions approving this Amendment
and authorizing the transactions contemplated herein, duly adopted by
the board of directors of each Loan Party, accompanied by certificates
of the secretary or an assistant secretary of the relevant Loan Party 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 the relevant Loan Party, 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; and
(c) such other agreements, documents, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may
reasonably request.
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9. The parties hereto hereby acknowledge and agree that, except as
specifically supplemented and amended, changed or modified hereby, the Credit
Agreement shall remain in full force and effect in accordance with its terms.
Each Loan Party hereby confirms and ratifies its liability under its respective
Security Instrument in all respects to which it is a party. Each Security
Instrument shall remain enforceable against each Loan Party which is a party
thereto in accordance with its terms and shall secure all of the Obligations.
10. The Loan Parties hereby reaffirm that as of the date of this
Amendment, the representations and warranties contained in the Loan Documents
are true and correct on the date hereof as though made on and as of the date of
this Amendment.
11. The Loan Parties represent and warrant that (a) the execution,
delivery and performance of this Amendment are within the corporate power and
authority of the Loan Parties and have been duly authorized by appropriate
proceedings, (b) the Liens under the Security Instruments are valid and
subsisting and secure the Loan Parties' obligations under the Loan Documents as
amended hereby, and (c) this Amendment constitutes a legal, valid, and binding
obligation of the Loan Parties enforceable in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the rights of creditors generally and general principles
of equity.
12. This Amendment shall be construed in accordance with and governed
by the laws of the United States of America and the State of Texas.
13. THE CREDIT AGREEMENT, THIS AMENDMENT, THE NOTES, THE GUARANTY
AGREEMENTS, THE LETTER OF CREDIT AGREEMENTS, THE SECURITY INSTRUMENTS AND THE
OTHER WRITTEN DOCUMENTS REFERRED TO IN THE CREDIT AGREEMENT OR EXECUTED IN
CONNECTION WITH OR AS SECURITY FOR THE NOTES REPRESENT, COLLECTIVELY, THE FINAL
AGREEMENT AMONG THE PARTIES HERETO AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN OR ORAL AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed effective as of the date first above written.
LOAN PARTIES: THE GNI GROUP, INC.
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By:___________________________________
Name: Xxxxx X. Xxxxxx, III
Title: Chief Financial Officer
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DISPOSAL SYSTEMS, INC.
By:___________________________________
Name: Xxxxx X. Xxxxxx, III
Title: Vice President
RESOURCE TRANSPORTATION SERVICES, INC.
By:___________________________________
Name: Xxxxx X. Xxxxxx, III
Title: Vice President
GNI CHEMICALS CORPORATION
By:__________________________________
Name: Xxxxx X. Xxxxxx, III
Title: Vice President
DISPOSAL SYSTEMS OF CORPUS CHRISTI, INC.
By:__________________________________
Name: Xxxxx X. Xxxxxx, III
Title: Vice President
LENDER: NATIONSBANK OF TEXAS, N.A.
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By:___________________________________
Name:
Title:
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