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EXHIBIT 4.1
FORM OF
THE GNI GROUP, INC.
12.00% SENIOR SUBORDINATED NOTE DUE DECEMBER 31, 2003
PPN# ______________
R-_ New York, New York
$_______________ December 31, 1996
THE GNI GROUP, INC., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to _________________________________
______________________________________________________, or registered assigns,
the principal amount of $__________ on December 31, 2003, with interest
(computed on the basis of twelve 30-day months) on the unpaid balance of such
principal amount at the rate of 12.00% per annum from the date hereof, payable
semi-annually on each June 30 and December 31 after the date hereof, commencing
June 30, 1997, until such unpaid balance shall become due and payable (whether
at maturity or at a date fixed for prepayment or by declaration or otherwise),
and with interest on any overdue principal (including any overdue prepayment of
principal) and premium, if any, and (to the extent permitted by applicable law)
on any overdue interest, at the rate of 14.00% per annum until paid, payable
semi-annually as aforesaid or, at the option of the holder hereof, on demand.
Payments of principal, premium, if any, and interest on this Note shall be made
in lawful money of the United States of America at the principal office of The
Chase Manhattan Bank, N.A., in the Borough of Manhattan, the City and State of
New York, or at such other office or agency in such Borough as the Company
shall have designated by written notice to the holder of this Note as provided
in the Note and Warrant Purchase Agreements referred to below.
This Note is one of the Company's 12.00% Senior Subordinated
Notes due December 31, 2003 (the "Notes"), originally issued pursuant to the
three Note and Warrant Purchase Agreements, each dated as of December 31, 1996,
as from time to time amended, between the Company and certain institutional
investors named therein, and is subject to the terms thereof. The holder of
this Note is entitled to the benefits of such Note and Warrant Purchase
Agreements, as from time to time amended, and may enforce the agreements of the
Company contained therein and exercise the remedies provided for thereby or
otherwise available in respect thereof.
This Note is a registered Note and is transferable only upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the holder
hereof
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or such holder's attorney duly authorized in writing. Reference in this Note
to a "holder" shall mean the person in whose name this Note is at the time
registered on the register kept by the Company as provided in such Note and
Warrant Purchase Agreements, and the Company may treat such person as the owner
of this Note for the purpose of receiving payment and for all other purposes,
and the Company shall not be affected by any notice to the contrary.
The holder of this Note is entitled to the benefits of a
certain Guaranty Agreement, dated as of December 31, 1996, by Disposal Systems,
Inc., Resource Transportation Services, Inc., GNI Chemicals Corporation and
Disposal Systems of Corpus Christi, Inc., each a Delaware corporation and a
subsidiary of the Company.
The indebtedness evidenced by this instrument is subordinated
to the prior payment in full of the Superior Debt (as defined in such Note and
Warrant Purchase Agreements) pursuant to, and to the extent provided in, such
Note and Warrant Purchase Agreements.
The Notes are under certain circumstances subject to required
or optional prepayment, in whole or in part, with a premium, all as specified
in such Note and Warrant Purchase Agreements.
In case an Event of Default, as defined in such Note and
Warrant Purchase Agreements, shall occur and be continuing, the unpaid balance
of the principal of this Note may become due and payable in the manner and with
the effect provided in such Note and Warrant Purchase Agreements.
This Note is made and delivered in New York, New York, and
shall be governed by the laws of the State of New York.
THE GNI GROUP, INC.
By: _______________________
Name:
Title:
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