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EXHIBIT 10.26
EIGHTH AMENDMENT TO CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT is made and entered into
effective as of this 31st day of December, 1996 (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 and that certain
Seventh Amendment to Credit Agreement dated as of September 23, 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 requested that, in addition to amendments
of the Credit Agreement, the Lender permit the issuance and sale of the
"Subordinated Notes" (as defined herein), which indebtedness will be
subordinate to the indebtedness under 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 definition of "Agreement", in Section 1.02 of the Credit
Agreement is hereby amended in its 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, and the
Eighth Amendment dated as of December 31, 1996, as the same may from
time to time be amended or supplemented.
3. Section 1.02 of the Credit Agreement is further amended by adding
the following definitions where appropriate:
"Eighth Amendment" shall mean the Eighth Amendment to Credit
Agreement dated as of December 31, 1996 among the Loan Parties and the
Lender.
"Subordinated Creditors" shall mean each of the holders of the
Subordinated Notes under the Subordinated Documents."
"Subordinated Debt" shall mean Indebtedness permitted by Section
9.01(h).
"Subordinated Documents" shall mean those certain Note and
Warrant Purchase Agreements dated of even date herewith.
"Subordinated Notes" shall mean those certain 12.00% Senior
Subordinated Notes due December 31, 2003, in the aggregate principal
amount of $20,000,000, to be issued by GNI pursuant to the Subordinated
Documents."
4. Section 9.01(h) of the Credit Agreement is hereby deleted in its
entirety, and the following is substituted therefor:
"(h) Indebtedness of GNI pursuant to the Subordinated Notes up to an
aggregate principal amount of $20,000,000; provided that proceeds of
such Indebtedness are used to prepay in full the principal outstanding
under Note D."
5. Section 9.02 of the Credit Agreement is hereby amended by adding
the following clause (c) before the period at the end of the sentence:
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"... and (c) the Guaranty Agreement dated December 31, 1996 in which
certain subsidiaries guarantee on a subordinated basis the Subordinated
Debt."
6. Section 9.10 of the Credit Agreement is hereby amended by adding
the following clause before the period at the end of the sentence:
"except as provided in the Subordinated Documents on December 31, 1996."
7. Article 9 of the Credit Agreement is hereby amended by adding the
following Section 9.12:
"Section 9.12 Subordinated Debt. (a) Make any principal or
interest payments to the Subordinated Creditors or cause or permit to be
made any principal payment on behalf of GNI on account of (or purchase,
prepay, redeem or defease) any Subordinated Debt; provided, however, GNI
may make scheduled payments of interest in accordance with the
Subordinated Documents as in effect on December 31, 1996 and pay the
principal of the Subordinated Notes at the stated maturity of December
31, 2003, if at the time of such payment and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing, and (b) modify or amend sections 6, 7, 8, 9, 10, 11, 12, 13,
19 or the definitions as used in any of such sections or the other terms
of the Subordinated Notes or Subordinated Documents as in existence on
December 31, 1996 and any related documents without the consent of the
Lender, if the effect of such modification or amendment would be to
shorten the time for payment on any Subordinated Notes, increase the
principal amount of the Subordinated Notes above $20,000,000, increase
the rate of interest on any Subordinated Note or change the method of
calculating interest so as to effectively increase the rate of interest
on any Subordinated Note, or change any other provisions which would
detrimentally effect the rights of the Lender. "
8. Section 10.01(d) of the Credit Agreement is hereby amended by
deleting the phrase "or, if no such grace period is provided, 30 days" in the
last two lines of such Section.
9. Section 10.01 of the Credit Agreement is hereby amended by adding
the following clause (k):
"(k) the maturity of the Subordinated Notes shall have been accelerated
or a written notice of prepayment shall have been given by or to GNI
under Sections 9.1, 9.2, 9.3, 9.4 or 9.5 of the Subordinated Documents."
10. Section 10.02 of the Credit Agreement is hereby amended by
inserting the words "or (k)" after the words "Sections 10.02 (e) or (f)" in the
second line of such Section.
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11. Assuming that no less than $15,000,000 of the net proceeds are
applied directly to the complete repayment of Note D and based on the latest
financial statements provided to the Lender, the incurrence of the Subordinated
Debt does not, as of the date of its funding, create a default of Sections
8.22, 8.23, 8.24, 8.25 or 8.28 of the Credit Agreement.
12. 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;
(b) executed copies of the Subordinated Documents; and
(c) such other agreements, documents, instruments, opinions,
certificates, waivers, consents, and evidence as the Lender may
reasonably request.
13. 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.
14. 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.
15. 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.
16. This Amendment shall be construed in accordance with and governed
by the laws of the United States of America and the State of Texas.
17. THE CREDIT AGREEMENT, THIS AMENDMENT, THE WAIVER, THE NOTES, THE
GUARANTY AGREEMENTS, THE LETTER OF CREDIT AGREEMENTS, THE SECURITY INSTRUMENTS
AND THE OTHER WRITTEN
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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
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
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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: Xxxxxxx X. Xxxxxxx, Xx.
Title: Vice President
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