FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS FIRST AMENDMENT, dated as of January 16, 1996, amends and modifies a
certain Credit and Security Agreement, dated as of December 19, 1995 (the
"Credit Agreement"), between FBS BUSINESS FINANCE CORPORATION, a Delaware
corporation (the "LENDER"), and CRYENCO, INC., a Colorado corporation and
CRYENCO SCIENCES, INC., a Delaware corporation (collectively and/or individually
the "BORROWER"). Terms not otherwise expressly defined herein shall have the
meanings set forth in the Credit Agreement.
PRELIMINARY STATEMENT
WHEREAS, the Borrower and the Lender desire to amend the Credit Agreement
as hereinafter set forth;
NOW, THEREFORE, for value received, the Borrower and the Lender agree as
follows:
ARTICLE I - AMENDMENTS
1.1 BORROWER. The Credit Agreement and SUPPLEMENT A thereto are hereby
amended to add Cryenex, Inc., a Delaware corporation, as a "Borrower". All
references to the Borrower therein and in any Loan Document shall include
Cryenex, Inc.
1.2 DEFINITIONS. The following definitions of the terms "ALT" and
"Cryenex" are hereby added to SECTION 1.1 of the Credit Agreement:
"ALT": Applied LNG Technologies USA, LLC, a Delaware limited
liability company, whose members are Cryenex and Golden Spread
Energy, Inc.
"CRYENEX": Cryenex, Inc., a Delaware corporation.
"REPURCHASE OBLIGATION": The obligation of CSI to repurchase from
either The CIT Group/Equity Investments, Inc. or Chemical Bank
warrants held by either such entity for issuance of common stock of
CSI.
1.3 GRANT OF SECURITY INTEREST. SECTION 3.1 (d) of the Credit
Agreement is hereby amended in its entirety to read as follows:
(d) General Intangibles (excluding the membership interest of
Cryenex in ALT;
1.4 ORGANIZATION. SECTION 4.1 of the Credit Agreement is hereby
amended in its entirety to read as follows:
4.1 ORGANIZATION. Each of Cryenco, CSI and Cryenex is a
corporation duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its respective
incorporation. Each of Cryenco, CSI and Cryenex is in good standing
and is duly qualified to do business in each state where, because
of the nature of its respective activities or properties, such
qualification is required. On the date hereof, each of Cryenco,
CSI and Cryenex conducts business in its own name exclusively and
has no trade names, styles or doing business forms except as
disclosed on SCHEDULE 4.1. Cryenco's taxpayer identification
number is I.D. No. 84-0767496. CSI's taxpayer identification
number is I.D. No. 52-1471630. As of January 16, 1996, Cryenex has
filed an application for a taxpayer identification number, but no
number has been assigned.
1.5 RESTRICTED PAYMENTS. SECTION 6.8 of the Credit Agreement is hereby
amended in its entirety to read as follows:
6.8 RESTRICTED PAYMENTS. Purchase or redeem or otherwise
acquire for value any shares of the Borrower's stock or any
warrants for the issuance of the Borrower's stock (other than the
issuance of common stock for warrants), or declare or pay any
dividends thereon (other than stock dividends, dividends payable to
the Borrower and dividends payable with respect to the preferred
stock of CSI which is issued and outstanding as of the date of this
Agreement or is issued and outstanding subsequent hereto in the
form of dividends on preferred stock of CSI), or make any
distribution to stockholders as such (other than the Borrower) or
set aside any funds for any such purpose, or prepay, purchase or
redeem any subordinated Indebtedness of the Borrower prior to the
scheduled maturity thereof (except for prepayments to The CIT
Group/Equity Investments, Inc. in respect of the Senior
Subordinated Note due 1998 and dated September 3, 1991, issued by
the Borrower's predecessors in interest, in the original amount of
$2,200,000, as long as any such prepayment is made when there has
not occurred and is continuing an Event of Default or an Unmatured
Event of Default under this Agreement and so long as any such
prepayment would not result in an Event of Default or Unmatured
Event of Default) or use any proceeds of Collateral or any proceeds
of Loans to make any scheduled payment to The CIT Group/Equity
Investments, Inc. in respect of the above-mentioned Senior
Subordinated Note at any time when there has occurred and is
continuing an Event of Default or an
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Unmatured Event of Default or if the making of such payment would
result in the occurrence of any Event of Default or Unmatured Event
of Default; or make any payment to Charterhouse Group
International, Inc. in respect of management fees unless and only
to the extent that the amount of the Borrowing Base exceeds the
amount of the Obligations by at least $500,000 immediately after
the payment and PROVIDING FURTHER, that prior to and after the
making of any such payment to Charterhouse Group International,
Inc., there has not occurred an Event of Default or an Unmatured
Event of Default under this Agreement.
1.6 INVESTMENTS. Clause (g) of SECTION 6.10 of the Credit Agreement is
hereby amended in its entirety to read as follows:
(g) Investments in ALT not exceeding $1,200,000 during the
Borrower's 1996 fiscal year, and for any fiscal year thereafter,
Investments in ALT which do not exceed in the aggregate the amount
by which the consolidated EBITDA of the Borrower during the most
recent four consecutive fiscal quarters exceeds the sum of their
consolidated unfinanced capital expenditures, cash taxes, interest
payments, dividends and mandatory debt retirement payments during
the same four consecutive fiscal quarters, by at least 25%,
PROVIDED, HOWEVER, that no such Investments shall be permitted
after the occurrence and during the continuance of any Event of
Default or any Unmatured Event of Default under this Agreement or
if such Investment would result in the occurrence of an Event of
Default or Unmatured Event of Default, and PROVIDED, FURTHER that
Investments in ALT in excess of $490,000 made during the term of
this Agreement shall be in the nature of extensions of credit to
ALT, which extensions of credit shall be evidenced by one or more
promissory notes containing terms and conditions reasonably
satisfactory to the Lender and such promissory notes shall be
pledged to the Lender to secure payment and performance of the
Obligations;
1.7 USE OF PROCEEDS. SECTION 6.16 of the Credit Agreement is hereby
amended in its entirety to read as follows:
6.16 USE OF PROCEEDS. Use or permit any proceeds of the Loans to
be used (a) either directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of "purchasing or carrying any
margin stock" within the meaning of Regulation U of the Federal
Reserve Board, as amended from time to time, and furnish to the
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Lender upon request, a statement in conformity with the
requirements of Federal Reserve Form U-1 referred to in Regulation
U of the Federal Reserve Board or (b) for purposes other than the
working capital needs and general business purposes of Cryenco,
including uses permitted by this Agreement.
1.8 EVENTS OF DEFAULT. SECTION 7.1(c) is amended in its entirety to
read as follows:
(c) ACCELERATION OF OTHER INDEBTEDNESS. Any event or condition
shall occur which results in the acceleration of the maturity of
any Indebtedness of, or guaranteed by, the Borrower or any other
Obligor or in the enforcement of any Repurchase Obligation or
enables the holder or holders of such other Indebtedness or any
trustee or agent for such holders (any required notice of default
having been given and any applicable grace period having expired)
to accelerate the maturity of such other Indebtedness or enables
the holder of any Repurchase Obligation or any trustee or agent
for such holder to enforce any Repurchase Obligation;
1.9 SCHEDULE 6.11. SCHEDULE 6.11 is amended in its entirety in the
form attached hereto as AMENDED SCHEDULE 6.11.
1.10 CONSTRUCTION. All references in the Credit Agreement to "this
Agreement," "herein" and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment.
ARTICLE II - REPRESENTATIONS AND WARRANTIES
2.1 AUTHORIZATION; VALIDITY AND BINDING EFFECT. To induce the Lender
to enter into this Amendment and to make and maintain the Loans under the Credit
Agreement as amended hereby, the Borrower hereby warrants and represents to the
Lender that it is duly authorized to execute and deliver this Amendment and each
other document delivered in connection herewith, and to perform its obligations
under the Credit Agreement as amended hereby and each other document delivered
in connection herewith, that this Amendment and the other documents delivered in
connection herewith constitute the legal, valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms, and that the
Borrower has taken all action necessary under its Articles of Incorporation,
Bylaws and applicable law regarding the transactions contemplated herein.
2.2 AFFIRMATION OF REPRESENTATIONS AND WARRANTIES. The Borrower hereby
restates all the representations and warranties in Article IV of the Credit
Agreement and affirms to the Lender that such representations and warranties are
true and correct as though made on the date hereof the same as if made on the
date hereof
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and fully set forth herein, except for changes that are permitted by the terms
of the Credit Agreement.
2.3 WARRANTS. All outstanding warrants for the issuance of common
stock of CSI and the holders thereof are listed on SCHEDULE 2.3 hereto. CSI
has delivered to the Lender, concurrent with the execution and delivery of this
Amendment true, correct and complete copies of all documents with respect to
which CSI and Chemical Bank are parties and that embody all agreements between
CSI and Chemical Bank with respect to CSI warrants held by Chemical Bank,
including all amendments, modifications and supplements to any such documents.
2.4 JOINT VENTURE AGREEMENT. The Borrower has delivered to the Lender
true, correct and complete copies of all documents that embody the joint venture
agreement for ALT, including all amendments, modifications and supplements
thereto.
ARTICLE III - CONDITIONS PRECEDENT
This Amendment shall become effective on the date first set forth above;
PROVIDED, HOWEVER, that the effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions precedent:
3.1 WARRANTIES. Before and after giving effect to this Amendment, the
representations and warranties in Article IV of the Credit Agreement shall be
true and correct as though made on the date hereof, except for changes that are
permitted by the terms of the Credit Agreement.
3.2 DEFAULTS. Before and after giving effect to this Amendment, no
Event of Default and no Unmatured Event of Default shall have occurred and be
continuing under the Credit Agreement. The execution by the Borrower of this
Amendment shall be deemed a representation that the Borrower has complied with
the foregoing condition.
3.3 DOCUMENTS. The following shall have been delivered to the Lender,
each duly executed and dated, or certified, as of the date hereof, as the case
may be:
(a) RESOLUTIONS. Certified copies of resolutions of the Board
of Directors of each of Cryenco, CSI and Cryenex authorizing or
ratifying the execution, delivery and performance, respectively, of
this Amendment and other documents provided for in this Amendment.
(b) CONSENTS. Certified copies of all documents evidencing any
necessary corporate action, consent or governmental or regulatory
approval (if any) with respect to this Amendment.
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(c) INCUMBENCY AND SIGNATURES. A certificate of the Secretary
or an Assistant Secretary of Cryenex certifying the names of the
officer or officers of Cryenex authorized to sign this Amendment
and other documents provided for in this Amendment, together with a
sample of the true signature of each such officer.
(d) CERTIFICATE OF INCORPORATION AND BY-LAWS. A certified copy
of the Certificate or Articles of Incorporation and the By-laws of
Cryenex, certified by the Secretary or an Assistant Secretary of
Cryenex.
(e) CERTIFICATE OF GOOD STANDING. A certificate of good
standing as to Cryenex issued by the Secretary of State of the
state in which Cryenex is organized, and each other state in which
the failure of Cryenex to be in good standing would constitute an
Adverse Event or have a material adverse effect on the Lender's
rights in any Collateral or Third Party Collateral.
(f) FINANCING STATEMENTS. UCC-1 financing statements executed
by Cryenex and substantially in the form of financing statements
executed and delivered to the Lender by CSI and Cryenco.
Notwithstanding the opening paragraph of this Article III, the certificate of
good standing may be delivered no later than ten days following the date hereof.
ARTICLE IV - GENERAL
4.1 EXPENSES. The Borrower agrees to reimburse the Lender upon demand
for all reasonable expenses (including reasonable attorneys' fees and legal
expenses) incurred by the Lender in connection with the preparation of this
Amendment and in enforcing the obligations of the Borrower hereunder, and to pay
and save the Lender harmless from all liability for any stamp or other taxes
which may be payable with respect to the execution or delivery of this
Amendment, which obligations of the Borrower shall survive any termination of
the Credit Agreement.
4.2 COUNTERPARTS. This Amendment may be executed in as many
counterparts as may be deemed necessary or convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original but all such counterparts shall constitute but one and the
same instrument.
4.3 SEVERABILITY. Any provision of this Amendment which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.
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4.4 LAW. This Amendment shall be a contract made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties hereunder.
4.5 SUCCESSORS; ENFORCEABILITY. This Amendment shall be binding upon
the Borrower and the Lender and their respective successors and assigns, and
shall inure to the benefit of the Borrower and the Lender and the successors and
assigns of the Lender. Except as hereby amended, the Credit Agreement shall
remain in full force and effect and is hereby ratified and confirmed in all
respects.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
FBS BUSINESS FINANCE CORPORATION
By /s/ William C. Phelps
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Its Vice President
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CRYENCO, INC.
By /s/ James A. Raabe
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Its CFO
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CRYENCO SCIENCES, INC.
By /s/ James A. Raabe
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Its CFO
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CRYENEX, INC.
By /s/ James A. Raabe
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Its Secretary
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