Exhibit
10.28
F IRST A MENDMENT TO C REDIT A GREEMENT
This FIRST AMENDMENT TO CREDIT
AGREEMENT (this “ First Amendment ”), dated as
of January 13, 2006, is among GAINSCO, INC., a Texas
corporation (“ Borrower ”), each other Obligor,
and THE FROST NATIONAL BANK, a national banking association
(“ Lender ”).
RECITALS:
Borrower and Lender have previously
entered into the Credit Agreement dated as of September 30,
2005 (such agreement, together with all amendments and
restatements, the “ Credit Agreement
”).
Borrower has requested amendments to
certain provisions of the Credit Agreement.
Lender has agreed to amend the
Credit Agreement, subject to the terms of this First
Amendment.
AGREEMENT:
NOW, THEREFORE, in consideration of
the premises and mutual covenants herein contained, the parties
hereto agree as follows:
ARTICLE I
Definitions
1.1 Definitions . All
capitalized terms not otherwise defined herein have the same
meaning as in the Credit Agreement.
ARTICLE II
Amendments to Credit
Agreement
2.1 Amendments to Credit
Agreement Section 1.1 .
(a) Section 1.1 is
amended by adding the following in alphabetical order:
“ Permitted Subordinated
Debt ” means Debt of Borrower or any Subsidiary which
(a) is unsecured, (b) does not benefit from any sinking
fund or similar arrangement, and (c) is subject to terms and
conditions (including being fully subordinated to the payment and
performance of all Obligations, payment provisions, covenants and
default provisions) acceptable to Lender.
“ SPV ” means a
corporation, limited liability company or business trust
(a) any equity of or beneficial interest in is owned by
Borrower or a Subsidiary and (b) which is organized for, and
shall conduct no operations other than related to,
1
the (i) incurrence of Debt by
Borrower, any Subsidiary or such corporation, limited liability
company or business trust or (ii) issuance of equity the
proceeds of which are used to acquire Debt of Borrower or a
Subsidiary and pay expenses related to the issuance of such Debt
and equity.
(f) The definition of “
Permitted Debt ” is deleted in its entirety and the
following is substituted in lieu thereof:
“ Permitted Debt
” means (a) Existing Debt, (b) the Obligations,
(c) trade accounts payable and other similar obligations
incurred in the ordinary course of business, (d) intercompany
balances in the ordinary course of business among Borrower and its
Subsidiaries; provided , that all amounts owed by any
Obligor to its Subsidiaries shall be subordinated to all
Obligations on terms acceptable to Lender, (e) Capital Leases
of Borrower and each of its Subsidiaries in an aggregate principal
amount not to exceed $500,000 at any time, (f) Permitted
Subordinated Debt; provided , (i) not later than 7
Business Days prior to the proposed issuance date of such Permitted
Subordinated Debt Borrower delivers to Lender drafts of all
documents evidencing or related to such Permitted Subordinated
Debt, the organizational documents for any SPV to be organized in
connection with such Permitted Subordinated Debt and such other
documents and information as Lender may request, (ii) no
Default or Event of Default shall exist prior to or after giving
effect to issuance of and application of the proceeds of such
Permitted Subordinated Debt, and (iii) prior to the
effectiveness of any document evidencing or related to such
Permitted Subordinated Debt, and at such other times as Lender may
request, Borrower and each appropriate Subsidiary shall execute and
deliver, and cause to be executed and delivered, to Lender such
documents as Lender may request, including amendments to the Loan
Documents and (g) other Debt of Borrower and Subsidiaries in
an aggregate amount not to exceed $500,000 at any time and that is
subordinated to the Obligations on terms acceptable to Lender in
its discretion.
(g) The definition of “
Subsidiary ” is amended by adding the following at the
end thereof:
For the purposes of the Loan
Documents, each SPV is deemed to be a Subsidiary of
Borrower.
2.2 Amendment to
Section 6.12 . Section 6.12 is amended by
adding the following:
(g) Borrower may acquire capital
stock of, limited liability company interest of and beneficial
interest in a SPV and a SPV may acquire Permitted Subordinated
Debt; provided , each of the requirements of clause
(f) of Permitted Debt exist or have occurred to the
satisfaction of Lender prior to any such acquisition.
2.3 Amendment to
Section 6.16 . Section 6.16 is amended by
adding the following at the end thereof:
No SPV shall conduct any business
other than as may be agreed to by Lender.
2
ARTICLE III
Waiver
3.1 Dividends . Credit
Agreement Section 6.5 provides that Borrower shall not
declare or pay a Dividend, except as provided in Credit Agreement
Section 6.5 . Borrower proposes to redeem all of the
18,120 outstanding shares of Preferred Stock in March, 2006 for an
aggregate redemption price, plus accrued dividends, that will not
exceed $18,550,000 (“ Preferred St
