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EXHIBIT 10.1(a)
BANK OF AMERICA, N.A.
SECOND AMENDED AND RESTATED LOAN AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement")
dated as of June 30, 2000, by and between BANK OF AMERICA, N.A., a national
banking association ("Bank") and the Borrower described below:
R E C I T A L S:
WHEREAS, Bank and Borrower are parties to that certain Amended and
Restated Loan Agreement dated December 9, 1999 (the "Original Loan Agreement"),
pursuant to which Bank extended a revolving line of credit to Borrower (the
"Revolver") in the original principal amount of up to $25,000,000, as more
fully described therein; and
WHEREAS, on September 21, 1999, the Borrower caused to be issued its
Convertible Note in the principal amount of $7,000,000 (such note and all other
notes issued pursuant thereto shall be referred to herein as the "Convertible
Notes"), together with certain warrants to purchase common stock of the
Borrower, payment of which Convertible Notes is subordinated to the prior
payment in full of Borrower's indebtedness to the Bank, up to a principal
amount of $25,000,000; and
WHEREAS, Bank and Borrower have amended the Original Loan Agreement on
four occasions to increase the amount of the Revolver and to make certain other
changes and modifications therein; and
WHEREAS, the Borrower has now requested that the Bank agree to renew
and increase the Revolver and to extend certain other credit facilities to the
Borrower, including a seasonal revolving line of credit and a term loan to
refinance the Convertible Notes; and
WHEREAS, Bank has agreed to extend such credit to Borrower, subject to
certain terms and conditions, including that the Original Loan Agreement be
restated in its entirety; and
WHEREAS, the parties hereto wish to set forth their agreement with
respect to the foregoing matters and to restate the Original Loan Agreement;
NOW, THEREFORE, in consideration of the Loans described below and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, Bank and Borrower agree that the Original Loan Agreement is
hereby restated as follows:
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1. DEFINITIONS AND REFERENCE TERMS. In addition to any other
terms defined herein, the following terms shall have the meaning set forth with
respect thereto:
A. ACCOUNTS RECEIVABLE. All of the Borrower's accounts,
lease receivables, instruments, contract rights, chattel paper, documents, and
general intangibles arising from the sale or lease of goods and/or the
rendition of services by the Borrower in the ordinary course of business, and
the proceeds thereof and all security and guaranties therefor, whether now
existing or hereafter created, and all returned, reclaimed or repossessed
goods, and all books and records pertaining to the foregoing.
B. APPLICABLE LIBOR MARGIN. The margin, for calculating
the applicable interest rate for any day for any loan based on LIBOR, equal to
the appropriate applicable LIBOR margin as set forth in Exhibit B hereto.
C. BORROWER. Blue Rhino Corporation, a Delaware
corporation.
D. BORROWER'S ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
E. COLLATERAL. The property and interests in property
securing payment and performance of the Loans, as set forth in Section 3
hereof.
F. CASH FLOW COVERAGE RATIO. The quotient of the
aggregate of Borrower's net income after tax (exclusive, however, of any
non-cash gain or loss attributable to Borrower's investment in R4 Technical
Center-North Carolina, LLC (the "Bottling Company") and any non-recurring
non-cash loss related to the redemption of the Convertible Notes), plus
depreciation and amortization, plus interest expense, minus dividends and
distributions actually paid, divided by the sum of the prior year's current
maturities of long term debt plus current maturities of capital leases, plus
interest expense, plus ten percent (10%) of the outstanding balance of the
Revolver and the Overline.
G. EBITDA. Earnings before interest expense, taxes,
depreciation and amortization and any non-cash gain or loss attributable to
Borrower's investment in the Bottling Company and any non-recurring loss
related to the redemption of the Convertible Notes.
H. EQUIPMENT. All machinery and equipment, including
fixtures, now owned or hereafter acquired by the Borrower.
I. FUNDED DEBT. Debt incurred by borrowing money,
specifically excluding trade debt or accruals arising in the ordinary course of
business, but including, without limitation (i) purchase money indebtedness,
(ii) the principal portion of obligations under capital leases, (iii)
reimbursement obligations under outstanding letters of credit, and (iv) all
obligations guaranteeing or intended to guarantee any debt of any other entity,
whether such obligation is direct or indirect.
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J. HAZARDOUS MATERIALS. All materials defined as
hazardous wastes or substances under any local, state or federal environmental
laws, rules or regulations, and petroleum, petroleum products, oil and
asbestos.
K. INVENTORY. Means all non-obsolete inventory of
Borrower of every kind or character, wherever located, for which Borrower:
(i) has full title, free and clear of any
security interest, liens and claims whatsoever; and
(ii) has the right to convey such inventory as
security for the Obligations; and
(iii) such inventory is in first class order,
condition and repair.
Without limiting the scope of the foregoing definition, Inventory shall
specifically include all "Cylinder Inventory" and "Eligible Inventory", as
defined in the Borrowing Base Agreement attached hereto.
L. LIBOR. The London Interbank Offered Rate for
thirty-day deposits, adjusted for applicable reserves, deposit insurance
assessments and other regulatory costs, as determined by the Bank, from time to
time.
M. LOANS. The loan described in Section 2 hereof and any
other existing or subsequent loan by Bank to the Borrower that is subject to
this Agreement.
N. LOAN DOCUMENTS. Loan Documents means this Loan
Agreement and any and all promissory notes executed by Borrower in favor of
Bank and all other documents, instruments, guaranties, certificates and
agreements executed and/or delivered by Borrower, any guarantor or third party
in connection with any Loan.
O. MATERIAL ADVERSE EFFECT. Any material adverse effect
on (i) the business, assets, operations or financial or other condition of
Borrower and its Subsidiaries taken as a whole, (ii) the Borrower's ability to
pay the Obligations in accordance with the terms thereof, or (iii) the
Collateral or Bank's security interest in the Collateral or the priority of
such security interest. Without limiting the foregoing, any adverse effect on
the business, assets, operations or financial or other condition of Borrower
and its subsidiaries (if any) involving, individually or in the aggregate, a
liability of the Borrower or any of its subsidiaries in excess of applicable
insurance coverage by more than $100,000 shall be deemed to be a "Material
Adverse Effect" within the meaning of the applicable provisions of this
Agreement.
P. NOTES. The Revolver Note, the Overline Note and the
Term Note, as defined herein.
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Q. OBLIGATIONS. The Loans and all other loans, advances,
indebted-ness, liabilities, obligations, covenants and duties (including
post-petition interest on the foregoing, to the extent lawful) owing, arising,
due or payable from the Borrower to the Bank of any kind or nature, present or
future, arising under this Agreement or any of the other Loan Documents
(including, without limitation any Hedge Agreement, as defined in subparagraph
2 (D) (ii)), whether direct or indirect (including those acquired by
assignment), absolute or contingent, primary or secondary, due or to become
due, now existing or hereafter arising. The term includes, without limitation,
all interest, charges, reasonable expenses, reasonable fees, reasonable
attorneys' fees and any other sums chargeable to the Borrower by the Bank under
this Agreement or any of the other Loan Documents.
R. PERSON. A corporation, an association, a joint
venture, a limited liability company, a partnership, an organization, a
business, an individual, a trust or a government or political subdivision
thereof or any government agency or any other legal entity.
S. TANGIBLE NET WORTH. The amount by which Borrower's
total assets exceed total liabilities in accordance with GAAP, minus (i)
goodwill, (ii) contract rights, (iii) assets representing claims on (A)
shareholders, directors, or officers or (B) Subsidiaries, and (iv) other assets
constituting intangible assets, including, without limitation, any patents,
trademarks, tradenames, copyrights or similar intellectual property.
T. SUBSIDIARY. As to any Person, each of the Persons
that directly or indirectly, through one or more intermediaries, is controlled
by such Person. For the purpose of this definition, "control" means the
possession, directly or indirectly, of over fifty percent (50%) of the voting
rights of the equity holders of the entity, whether through the ownership of
voting securities, by contract or otherwise.
ACCOUNTING TERMS. All accounting terms not specifically defined or
specified herein shall have the meanings generally attributed to such terms
under generally accepted accounting principles ("GAAP"), as in effect from time
to time, consistently applied. All financial computations made under this
Agreement for the purpose of determining compliance with the financial
requirements of this Agreement shall be made, and all financial information
required under this Agreement shall be prepared, in accordance with GAAP, as in
effect on the date hereof.
2. LOANS. Subject to the terms of this Agreement, Bank hereby
agrees to make loans to Borrower, as follows:
A. Revolving Line of Credit. (i) Subject to the terms hereof,
Bank agrees to extend a revolving line of credit (the "Revolver") to Borrower,
in the original principal amount of up to Thirty-Eight Million Dollars
($38,000,000), for the purpose of refinancing and increasing the Borrower's
revolving line of credit, financing Borrower's short-term working capital
needs, including but not limited to payments under letters of
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credit issued for the benefit of Borrower, and financing acquisitions by
Borrower. The Revolver will be available during the period commencing on the
date hereof and continuing until November 30, 2001 (which date, as extended in
accordance with the terms hereof, shall be the "Revolver Maturity Date").
Borrower may from time to time borrow, repay and re-borrow, subject to the
Borrowing Base Agreement attached hereto as Exhibit "A" and by reference made a
part hereof, and the Borrowing Base set forth therein (the "Borrowing Base").
It is provided, however, that the aggregate face amount of letters of credit
issued by Bank for the account of Borrower pursuant to the Revolver shall not
at any time exceed $10,000,000. Borrower shall execute and deliver to Bank a
promissory note (the "Revolver Note") in the principal amount of $38,000,000,
which Revolver Note shall bear interest and be payable in accordance with the
terms set forth hereinbelow. It is further provided that the commitment of the
Bank to continue to make the Revolver available to the Borrower beyond the
Revolver Maturity Date is subject to annual review by the Bank (subject to and
following receipt of the Borrower's annual report of audit as provided
hereinafter), and the Bank may, in its sole discretion, elect to renew the
commitment for an additional year, whereupon the Revolver Maturity Date shall
be extended to the date that is one year after the then-current Revolver
Maturity Date.
(ii) Interest and Principal. Subject to the terms of subparagraph 2
(D) (i) below, interest on the principal amount outstanding under the Revolver
from time to time shall accrue at a floating rate of thirty-day LIBOR, plus two
hundred fifty basis points (2.50%) per annum, which rate shall change on and as
of each date LIBOR changes. Accrued interest shall be payable monthly in
arrears. The principal of the Note shall be repaid in full, if not sooner paid,
on the Revolver Maturity Date, together with all accrued but unpaid interest
thereon.
(iii) Fees. Borrower shall pay to Bank a commitment fee in the
amount of $100,000 at the closing of the Revolver. Borrower shall also pay
Bank, quarterly as invoiced by Bank, an availability fee in the amount of
one-quarter percent (1/4%) of the average unused amount of the Revolver.
Additionally, all letters of credit issued by the Bank shall be subject to an
issuance fee, which shall be paid by Borrower upon issuance of each letter of
credit, in the amount of three-eighths percent (3/8%) for documentary letters
of credit, and in the amount of one and one-half percent (1.5%) per annum for
standby letters of credit.
(iv) Collateral Security. Repayment in full of the Revolver shall
be secured by the Collateral.
(v) Administration of Accounts. (a) Borrower agrees to submit to
Bank, within thirty (30) days after the end of each month during the term of
the Revolver, a summary aged trial balance of all accounts existing as of the
last day of such month, and all inventory, in form satisfactory to the Bank.
Borrower agrees to keep accurate and complete records of its accounts, and of
all payments and collections thereof, and of all inventory.
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(b) Monthly, within thirty (30) days after the end of
each monthly period, Borrower shall submit a borrowing base certificate to Bank
setting forth the amount of Borrower's Eligible Accounts Receivable (as defined
in the Borrowing Base Agreement), Eligible Inventory (as defined in the
Borrowing Base Agreement) and Equipment as of the last day of such monthly
period.
(c) Whether or not an Event of Default has occurred,
Borrower shall permit Bank, including any of its officers, agents or designees,
to inspect and verify the amount of or any other matter relating to the
Borrower's accounts. Borrower agrees to cooperate fully with Bank in such
inspection and verification process. Borrower further agrees to pay or
reimburse Bank for payment of all expenses incurred to monitor, inspect and
examine Borrower's accounts, up to an amount of $5,000 per year during the term
of this Agreement.
(d) Bank shall have the right at any time after the
occurrence of an Event of Default to notify any or all account debtors that
Borrower's accounts have been assigned to Bank and to collect the accounts in
its name.
(vi) Guaranties. Payment in full of all indebtedness of the
Borrower pursuant to the Revolver shall be guaranteed by all of the
subsidiaries of the Borrower, including USA Leasing, LLC, Rhino Services, LLC,
CPD Associates, Inc., Uniflame Corporation, and any Subsidiary formed or
acquired after the date of this Agreement (the "Guarantors"), pursuant to
guaranty agreements (the "Guaranties") in form and substance satisfactory to
Bank. The Guaranties shall be secured by a security interest in and lien on all
personal property assets of the Guarantors, now owned or hereafter acquired,
including all proceeds thereof (the "Guaranty Collateral").
B. Overline. (i) Subject to the terms hereof, Bank agrees to
extend a revolving seasonal line of credit (the "Overline") to Borrower, in the
original principal amount of up to Ten Million Dollars ($10,000,000), for the
purpose of financing Borrower's short-term seasonal working capital needs,
specifically, payments to be received under documentary letters of credit
issued for the benefit of the Borrower for goods sold to Wal-Mart. The Overline
will be available during the period commencing on the date hereof and
continuing until November 30, 2001 (which date, as extended in accordance with
the terms hereof, shall be the "Overline Maturity Date"), provided that
advances under the Overline may only be obtained during the period of June 1
through November 30 in each year. Borrower may from time to time borrow, repay
and re-borrow, subject to the Borrowing Base Agreement attached hereto as
Exhibit "A" and by reference made a part hereof, and the Borrowing Base set
forth therein (the "Borrowing Base") for the purpose of reimbursing the Bank
for drafts drawn under the letters of credit issued by the Bank. Borrower shall
execute and deliver to Bank a promissory note (the "Overline Note") in the
principal amount of $10,000,000, which Overline Note shall bear interest and be
payable in accordance with the terms set forth hereinbelow. It is further
provided that the commitment of the Bank to continue to make the Overline
available to the Borrower beyond the Overline Maturity Date is subject to
annual review by the Bank (subject to and following receipt of the Borrower's
annual report of audit as provided
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hereinafter), and the Bank may, in its sole discretion, elect to renew the
commitment for an additional year, whereupon the Overline Maturity Date shall
be extended to the date that is one year after the then-current Overline
Maturity Date.
(ii) Interest and Principal. Subject to the terms of subparagraph 2
(D) (i) below, interest on the principal amount outstanding under the Overline
from time to time shall accrue at a floating rate of thirty-day LIBOR, plus two
hundred fifty basis points (2.50%) per annum, which rate shall change on and as
of each date LIBOR changes. Accrued interest shall be payable monthly in
arrears. The principal of the Note shall be repaid in full, if not sooner paid,
on the Overline Maturity Date, together with all accrued but unpaid interest
thereon.
(iii) Fees. Borrower shall pay Bank, quarterly as invoiced by Bank,
an availability fee in the amount of one-quarter percent (1/4%) of the average
unused amount of the Overline. Additionally, all letters of credit issued by
the Bank shall be subject to an issuance fee, which shall be paid by Borrower
upon issuance of each letter of credit, in the amount of three-eighths percent
(3/8%) for documentary letters of credit, and in the amount of one and one-half
percent (1.5%) per annum for standby letters of credit.
(iv) Collateral Security. Repayment in full of the Overline shall
be secured by the Collateral.
(v) Guaranties. Payment in full of all indebtedness of the
Borrower pursuant to the Overline shall be guaranteed by the Guarantors
pursuant to the Guaranties, which Guaranties shall be secured by the Guaranty
Collateral.
C. Term Loan. (i) Subject to the terms hereof, Bank agrees to
extend a term loan (the "Term Loan") to Borrower, in the original principal
amount of up to Seven Million Dollars ($7,000,000), for the purpose of
refinancing the Convertible Notes. Borrower shall execute and deliver to Bank a
promissory note (the "Term Note") in the principal amount of $7,000,000, which
Term Note shall bear interest and be payable in accordance with the terms set
forth herein. The Term Note shall be payable in quarterly installments in the
principal amount of $1,000,000 each, together with accrued interest, beginning
October 31, 2000 and continuing on the last day of each January, April, July
and October thereafter through and including April 30, 2002 (the "Term Loan
Maturity Date"), on which date all remaining principal and accrued but unpaid
interest thereon shall be paid in full.
(ii) Interest and Principal. Subject to the terms of subparagraph 2
(D) (i) below, interest on the principal amount outstanding under the Term Loan
from time to time shall accrue at a floating rate of thirty-day LIBOR, plus two
hundred eighty-five basis points (2.85%) per annum, which rate shall change on
and as of each date LIBOR changes. Accrued interest shall be payable monthly in
arrears. The principal of the Term Note shall be repaid in full, if not sooner
paid, on the Term Loan Maturity Date, together with all accrued but unpaid
interest thereon.
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(iii) Collateral Security. Repayment in full of the Term Loan shall
be secured by the Collateral.
(iv) Guaranties. Payment in full of all indebtedness of the
Borrower pursuant to the Term Loan shall be guaranteed by the Guarantors
pursuant to the Guaranties, which Guaranties shall be secured by the Guaranty
Collateral.
D. Other Interest Rate Provisions Applicable to the Loans.
(i) The interest rate applicable to the Loans will vary, according
to the Borrower's compliance with the Funded Debt to EBITDA ratio (as defined
below), as set forth in Exhibit B attached hereto, which ratio shall be
computed by the Borrower's certified public accountants, in a manner reasonably
acceptable to the Bank. Such financial ratio shall be calculated quarterly as
of the last day of each fiscal quarter of the Borrower and, if the threshold
ratio set forth on Exhibit B is satisfied, the alternative interest rate set
forth on Exhibit B shall apply to the Loans during the next succeeding quarter,
beginning with the first day of the month following receipt of the Borrower's
quarterly and annual financial statements, respectively. It is provided,
however, that the Borrower must be in compliance with all of the terms and
provisions of this Agreement to receive the rates set forth in Exhibit B.
(ii) Borrower shall also have the option to fix the interest rate
on all or any portion of the Loans, at any time, through the use of a Hedge
Agreement purchased from the Bank at the market rate for such products. For
purposes hereof, a "Hedge Agreement" means any agreement between Borrower and
Bank, or any affiliate of Bank, now existing or hereafter entered into, which
provides for an interest rate or commodity swap, cap, floor, collar, forward
foreign exchange transaction, currency swap, cross-currency swap, currency
option, or any combination of, or option with respect to, these or similar
transactions, for the purpose of hedging Borrower's exposure to fluctuations in
interest rates, currency valuations or commodity prices. Notwithstanding any
other terms of this Agreement, any loan subject to a Hedge Agreement shall be
prepayable only in accordance with, and subject to any fees imposed under, the
terms of such Hedge Agreement. Borrower agrees that it will enter into Hedge
Agreements (or other arrangements reasonably acceptable to the Bank) for not
less than $10,000,000 of the Loans until the Term Loan Maturity Date within
ninety (90) days after closing of the Loans.
E. Information Requirements Related to Acquisitions by Borrower.
Not less than thirty (30) days prior to obtaining any extensions of credit
under the Revolver in a principal amount of $1,000,000 or more (whether such
amount consists of one or more such advances) for the purpose of financing the
cost (in whole or in part) of any acquisition (whether such acquisition is by
merger or purchase of assets), Borrower shall provide to Bank such information
concerning the proposed acquisition and the entity to be acquired (or the
assets to be purchased) as the Bank shall reasonably request. All such
information shall be treated by the Bank as confidential information, and shall
not
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be disclosed to or used by any other person without the express written consent
of Borrower. Bank must be reasonably satisfied with the purpose, structure and
business prospects for such acquisition prior to agreeing to make any advances
to Borrower therefor.
3. COLLATERAL SECURITY. Payment and performance of the Notes
shall be secured by and the Borrower hereby grants, conveys, transfers and
assigns to the Bank a security interest in and lien upon all Accounts
Receivable (as such term is defined in the Borrowing Base Agreement attached
hereto), and all Inventory and Equipment of Borrower, now owned or hereafter
acquired, including all proceeds thereof.
Borrower agrees and undertakes to execute and deliver to the Bank such
security agreements, pledge agreements, assignments, financing statements,
subordinations, certificates, waivers, estoppel agreements, and other
documentation, in form acceptable to the Bank, as may be requested by the Bank
in connection with the Collateral.
Borrower further agrees that it will assign and pledge to the Bank all
of its ownership interest in R4 Technical Center-North Carolina, LLC, as
additional collateral security for the Notes. Borrower will also grant Bank a
security interest in and lien upon any real property acquired after the date of
this Agreement costing in excess of $100,000, pursuant to deeds of trust,
mortgages or security deeds reasonably satisfactory to Bank, as additional
collateral security for the Notes.
4. CONDITIONS PRECEDENT. The Bank's agreement to extend the Loans
to the Borrower is subject to the fulfillment, to the Bank's satisfaction, of
all of the following conditions:
A. Bank shall have received, on or before the date hereof (i) a
copy of the resolutions of the Board of Directors of the Borrower, certified on
such date by an officer of the Borrower, authorizing the execution and delivery
of this Agreement, the borrowings hereunder and the execution and delivery of
the Notes, the other Loan Documents and the Collateral, and (ii) such
additional documents and requirements as the Bank or counsel for the Bank may
reasonably request.
B. The Borrower shall have executed and delivered all
documentation for the Loan, as requested by the Bank, which shall be in form
and content reasonably accept-able to the Bank and its counsel.
C. The Borrower shall have provided to the Bank, in form
satisfactory to the Bank, all financial and other information requested by Bank
as to its business and affairs.
D. The Borrower shall have provided to the Bank, in form and
content satisfactory to the Bank and its counsel, satisfactory evidence that
the Borrower is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has the corporate and
legal authority to own its property and carry on its business as now being
conducted.
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E. Each of the subsidiaries of the Borrower shall have provided
to the Bank certified copies of resolutions of their governing bodies
authorizing execution and delivery of the Guaranties and the Guaranty
Collateral, and satisfactory evidence that each of such subsidiaries is duly
organized, validly existing and in good standing under the laws of their
respective states of incorporation.
F. Bank of America Asset Based Lending Services shall have
completed a field examination of the Borrower's assets, which examination shall
be reasonably satisfactory to the Bank.
G. The Bank shall have received an opinion of the Borrower's
counsel with respect to such matters and in such form as is reasonably
acceptable to the Bank and its counsel.
H. The Borrower shall have paid or provided for payment of an
arrangement/ administration fee in the amount of $25,000.
I. All terms and conditions of the Bank's commitment letter to
the Borrower for the Loans have been satisfied and fulfilled, to the reasonable
satisfaction of the Bank.
J. No event has occurred or failed to occur that would have a
Material Adverse Effect on the financial condition of the Borrower as set forth
in its most recent annual and quarterly financial statements and
internally-prepared monthly financial statements submitted to Bank.
K. The Borrower shall have certified that the execution of the
Loan Documents shall not cause any default under any other contract or
agreement to which the Borrower or any of its subsidiaries is subject.
L. The Borrower shall have paid or provided for the payment of
all costs and expenses incurred in connection with the making of the Loans,
including, without limitation, the Bank's attorneys' fees and expenses.
5. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Bank as follows:
A. GOOD STANDING. Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the power and authority to own its property and to carry on
its business in each jurisdiction in which Borrower does business, and each of
Borrower's subsidiaries is duly organized, validly existing and in good
standing under the laws of the state of its organization, and has the power and
authority to own its property and carry on its business.
B. AUTHORITY AND COMPLIANCE. Borrower and each of its
subsidiaries have full power and authority to execute and deliver the Loan
Documents and to incur and perform the obligations provided for therein, all of
which have been duly
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authorized by all proper and necessary action of the appropriate governing body
of Borrower and its subsidiaries, respectively. No consent or approval of any
public authority or other third party is required as a condition to the
validity of any Loan Document, and Borrower and each such Subsidiary, to the
best of the Borrower's knowledge after reasonable inquiry, are in compliance
with all laws and regulatory requirements to which they are subject.
C. BINDING AGREEMENT. This Agreement and the other Loan
Documents executed by Borrower and its subsidiaries constitute their valid and
legally binding obligations, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorganization and similar laws and other
laws generally affecting the enforceability of creditors' rights and to general
principles of equity.
D. LITIGATION. There is no material proceeding involving
Borrower or any of its subsidiaries pending or, to the knowledge of Borrower,
threatened before any court or governmental authority, agency or arbitration
authority, which, if determined adversely to the Borrower, would have a
Material Adverse Effect on the Borrower and its subsidiaries, taken as a whole,
except as disclosed in Exhibit D attached hereto.
E. NO CONFLICTING AGREEMENTS. There is no charter,
bylaw, stock provision, partnership agreement or other document pertaining to
the organization, power or authority of Borrower or any of its subsidiaries and
no provision of any existing agreement, mortgage, indenture or contract binding
on Borrower or any of its subsidiaries or affecting their property, which would
conflict with or in any way prevent the execution, delivery or carrying out of
the terms of this Agreement and the other Loan Documents.
F. OWNERSHIP OF ASSETS. Borrower and its subsidiaries
have good title to their assets, and such assets are free and clear of liens,
except those granted to Bank and as disclosed to Bank in writing prior to the
date of this Agreement.
G. TAXES. All material taxes and assessments due and
payable by Borrower and its subsidiaries have been paid or are being contested
in good faith by appropriate proceedings and Borrower and its subsidiaries have
filed all material tax returns which they are required to file.
H. FINANCIAL STATEMENTS. The financial statements of
Borrower heretofore delivered to Bank have been prepared in accordance with
GAAP applied on a consistent basis throughout the period involved and fairly
present Borrower's financial condition as of the date or dates thereof, and
there has been no material adverse change in Borrower's financial condition or
operations since July 31, 1999. To the best of its knowledge, all factual
information furnished by Borrower to Bank in connection with this Agreement and
the other Loan Documents is and will be accurate and complete on the date as of
which such information is delivered to Bank.
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I. PLACE OF BUSINESS. Borrower's chief executive office
is located at: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
J. ENVIRONMENTAL MATTERS. The conduct of Borrower's and
its subsidiaries' business operations does not and will not violate any federal
laws, rules or ordinances for environmental protection, regulations of the
Environmental Protection Agency, any applicable local or state law, rule,
regulation or rule of common law or any judicial interpretation thereof
relating primarily to the environment or Hazardous Materials, and Borrower and
its subsidiaries will not use or permit any other party to use any Hazardous
Materials at their places of business except such materials as are incidental
to their normal course of business, maintenance and repairs and which are
handled in compliance with all applicable environmental laws. Borrower agrees
to permit Bank, its agents, contractors and employees to enter and inspect any
of Borrower's and its subsidiaries' places of business or any of their other
property of Borrower at any reasonable time upon three (3) days prior notice
for the purposes of conducting an environmental investigation and audit
(including taking physical samples) to insure that they are complying with this
covenant and Borrower shall reimburse Bank on demand for the costs of any such
environmental investigation and audit. Borrower shall provide Bank, its agents,
contractors, employees and representatives with access to and copies of any and
all data and documents relating to or dealing with any Hazardous Materials
used, generated, manufactured, stored or disposed of by Borrower's and its
subsidiaries' business operations within five (5) days of the request therefor.
K. NO MATERIAL ADVERSE EFFECT. To the best of the
Borrower's knowledge, neither this Agreement nor any of the Loan Documents, nor
any statements furnished to the Bank by or on behalf of the Borrower and its
subsidiaries in connection with the Loans or the Loan Documents, contain any
untrue statement of a material fact. To the best knowledge of the Borrower,
there is no fact that the Borrower has not disclosed to the Bank in writing
that would have a Material Adverse Effect.
L. CONTINUATION OF REPRESENTATION AND WARRANTIES. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof and at and as of the date of any future
advance under any Loan (except insofar as such representations and warranties
relate expressly to an earlier date, and except for the representations and
warranties in Section 6. D and H, which shall be deemed to be made solely on
the date of this Agreement).
6. AFFIRMATIVE COVENANTS. Until full payment and performance of
all Obligations of Borrower under the Loan Documents, Borrower will, unless
Bank consents otherwise in writing (and without limiting any requirement of any
other Loan Document):
A. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows, determined in accordance with GAAP applied on a
consistent basis throughout the period involved, except to the extent modified
by the following definitions:
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(i) Maintain a ratio of total liabilities to Tangible Net
Worth as follows:
(a) not greater than 2.75 to one from August 31, 2000 to
October 30, 2000;
(b) not greater than 2.50 to one from October 31, 2000
to January 30, 2001; and
(c) not greater than 2.00 to one at all times from and
after January 31, 2001.
(ii) Maintain a ratio of Funded Debt to EBITDA, as
follows:
(a) not greater than 3.75 to one from August 31, 2000 to
October 30, 2000;
(b) not greater than 3.50 to one from October 31, 2000
to January 30, 2001;
(c) not greater than 2.75 to one from January 31, 2001
to April 29, 2001; and
(d) not greater than 2.50 to one from and after April
30, 2001.
(iii) Maintain a Cash Flow Coverage Ratio of not less than
1.2 to one at June 30, 2000 for the trailing four (4) fiscal quarters, and at
each fiscal quarter end thereafter.
B. FINANCIAL STATEMENTS AND OTHER INFORMATION. Maintain
a system of accounting satisfactory to Bank and in accordance with GAAP applied
on a consistent basis throughout the period involved, permit Bank's officers or
authorized representatives to visit and inspect Borrower's books of account and
other records at such reasonable times and as often as Bank may desire.
Borrower shall pay the reasonable fees and disbursements of any accountants or
other agents of Bank selected by Bank for the foregoing purposes one time each
year during the term of the Loans. Unless written notice of another location is
given to Bank, Borrower's books and records will be located at Borrower's chief
executive office set forth above. All financial statements called for below
shall be prepared in form and content acceptable to Bank and by independent
certified public accountants acceptable to Bank.
In addition, Borrower will:
(i) Furnish to Bank (a) a report of audit of Borrower (including
any management letter), prepared by a firm of certified public accountants
reasonably acceptable to Bank, within 120 days after the close of each such
fiscal year and (b) a copy of the Borrower's federal income tax return, for
each fiscal year of Borrower, within 30 days of the date the same is filed;
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(ii) Furnish to Bank a copy of the Borrower's quarterly report on
Form 10-Q, within 45 days after the close of each such fiscal quarter;
(iii) Furnish to Bank monthly financial statements (including a
balance sheet and profit and loss statement) of Borrower, which shall be
prepared by Borrower, for each month of each fiscal year of Borrower, within 45
days after the close of each such month.
(iv) Furnish to Bank a compliance certificate for (and executed by
an authorized representative of) Borrower concurrently with and dated as of the
date of delivery of each of the financial statements as required in paragraphs
(i) and (ii) above, containing (a) a certification that the financial
statements of even date are true and correct and that the Borrower is not in
default under the terms of this Agreement, and (b) computations and
conclusions, in such detail as Bank may request, with respect to compliance
with this Agreement, and the other Loan Documents, including computations of
all quantitative covenants. Such compliance certificates shall be substantially
in the form of Exhibit C attached hereto.
(v) Furnish to Bank promptly such additional information, reports
and statements respecting the business operations and financial condition of
Borrower, from time to time, as Bank may reasonably request.
C. INSURANCE. Except as otherwise provided herein,
maintain insurance with insurance companies reasonably acceptable to the Bank
on such of its properties, in such amounts and against such risks as is
customarily maintained by similar businesses operating in the same vicinity,
specifically to include fire and extended coverage insurance covering all
assets, business interruption insurance, and liability insurance, all to be
with such companies and in such amounts as are satisfactory to Bank.
Satisfactory evidence of such insurance will be supplied to Bank prior to
funding under the Loans and 30 days prior to each policy renewal. Bank
acknowledges and agrees that Borrower is self-insured for collision damage on
all vehicles constituting equipment; that it requires its lessees to maintain
collision insurance on all vehicles constituting inventory held for lease,
which insurance names the Borrower as loss payee; and that it is self-insured
for workers compensation insurance. Borrower agrees that it will notify Bank
immediately if separate insurance coverage is hereafter purchased by Borrower
covering such risks, such insurance to be subject to the terms of this section.
D. EXISTENCE AND COMPLIANCE. Maintain its existence,
good standing and qualification to do business, where required and comply with
all laws, regulations and governmental requirements including, without
limitation, environmental laws applicable to it or to any of its property,
business operations and transactions.
E. ADVERSE CONDITIONS OR EVENTS. Promptly advise Bank in
writing of (i) any condition, event or act which comes to its attention that
the Borrower reasonably believes would or might have a Material Adverse Effect
on Borrower's financial condition or operations, the Collateral, or Bank's
rights under the Loan
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Documents, (ii) any litigation filed by or against Borrower seeking in excess
of $50,000 in damages, (iii) any event that has occurred that would constitute
an event of default under any Loan Documents and (iv) any uninsured or
partially uninsured loss through fire, theft, liability or property damage in
which the uninsured damages are in excess of an aggregate of $100,000.00.
F. TAXES AND OTHER OBLIGATIONS. Pay all of its taxes,
assessments and other obligations, including, but not limited to taxes, costs
or other expenses arising out of this transaction, as the same become due and
payable, except to the extent the same are being contested in good faith by
appropriate proceedings in a diligent manner.
G. MAINTENANCE. Maintain all of its tangible property
in good condition and repair, except for those properties deemed to be obsolete
by the Borrower, and make all necessary replacements thereof, and preserve and
maintain all licenses, trademarks, privileges, permits, franchises,
certificates and the like necessary for the operation of its business.
H. NOTIFICATION OF ENVIRONMENTAL CLAIMS. Borrower shall
immediately advise Bank in writing of (i) any and all enforcement, cleanup,
remedial, removal, or other governmental or regulatory actions instituted,
completed or threatened pursuant to any applicable federal, state, or local
laws, ordinances or regulations relating to any Hazardous Materials affecting
Borrower's business operations; and (ii) all claims made or threatened by any
third party against Borrower relating to damages, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials. Borrower
shall immediately notify Bank of any remedial action taken by Borrower with
respect to Borrower's business operations.
7. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without
the prior written consent of Bank (and without limiting any requirement of any
other Loan Documents):
A. OWNERSHIP AND MANAGEMENT. Make or permit to be made
any material change in the ownership or executive management of the Borrower;
provided, however, that the Borrower shall not be prohibited by this covenant
from conducting any public offering of its capital stock.
B. TRANSFER OF ASSETS OR CONTROL. Sell, lease, sell and
leaseback, assign or otherwise dispose of or transfer any assets, except in the
normal course of its business, or enter into any merger or consolidation, or
transfer control or ownership of the Borrower, or form or acquire any
Subsidiary, except for a wholly-owned Subsidiary which has executed a guaranty
of the Loans, in form satisfactory to the Bank.
C. LIENS. Grant, suffer or permit any contractual or
noncontractual lien on or security interest in its assets, except in favor of
Bank, or fail to promptly pay when due all lawful claims, whether for labor,
materials or otherwise, except claims
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which the Borrower is diligently contesting in good faith and has provided
reserves that are adequate in the Bank's reasonable judgment.
D. EXTENSIONS OF CREDIT. Make any loan or advance to any
individual, partnership, corporation or other entity, except (i) intercompany
advances to Subsidiaries of the Borrower which have guaranteed all indebtedness
to the Bank, (ii) as previously disclosed to Bank in writing, and (iii) other
loans, not in excess of an aggregate principal amount of $250,000.
E. BORROWINGS. Create, incur, assume or become liable in
any manner for any indebtedness (for borrowed money, deferred payment for the
purchase of assets, lease payments, as surety or guarantor for the debt for
another, or otherwise), other than to Bank, except for normal trade debts
incurred in the ordinary course of Borrower's business, and except for existing
indebtedness disclosed to Bank in writing and acknowledged by Bank prior to the
date of this Agreement. Borrower shall also be permitted to incur indebtedness
to Subsidiaries, shareholders or related companies hereafter, as long as the
incurrence of such indebtedness is disclosed to Bank and all such indebtedness
is fully subordinated to Borrower's indebtedness to Bank, in form satisfactory
to Bank. Borrower shall also be permitted to incur up to $500,000, in the
aggregate, of purchase money indebtedness in connection with acquisitions by
Borrower, payable to the former owners of the acquired entities or assets
(exclusive of indebtedness related to the purchase of the assets of Uniflame
Corporation).
F. CAPITAL LEASES. Enter into capital leases in excess
of an aggregate of Two Million Five Hundred Thousand Dollars ($2,500,000) in
amount of all capital leases at any time outstanding.
G. DIVIDENDS AND DISTRIBUTIONS. At any time Borrower is
in default under this Agreement, or would be in default following or as a
result thereof, make any distribution (other than dividends payable in capital
stock of Borrower) on any shares of any class of its capital stock, or apply
any of its property or assets to the purchase, redemption or other retirement
of any shares of any class of capital stock of Borrower, or in any way amend
its capital structure.
H. CHARACTER OF BUSINESS. Change the general character
of business as conducted at the date hereof, or engage in any type of business
not reasonably related to its business as presently conducted.
8. DEFAULT. Borrower shall be in default under this Agreement and
under each of the other Loan Documents (an "Event of Default") if it shall
default in the payment of any amounts due and owing under the Loans. Borrower
shall also be in default if it should fail to timely and properly observe, keep
or perform any term, covenant, agreement or condition in any Loan Document
(other than a payment default) or in any other loan agreement, promissory note,
guaranty, security agreement, deed of trust, assignment, pledge or other
contract securing or evidencing payment of any indebtedness of Borrower to Bank
or any affiliate or subsidiary of Bank of America
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Corporation, and such default shall continue uncured for a period of thirty
(30) days (such thirty-day cure period to apply to any such default,
notwithstanding the absence of any such cure period in or the conflicting
provisions of any other Loan document).
9. REMEDIES UPON DEFAULT. If an Event of Default shall occur,
Bank shall have all rights, powers and remedies available under each of the
Loan Documents as well as all rights and remedies available at law or in
equity.
10. NOTICES. All notices, requests or demands which any party is
required or may desire to give to any other party under any provision of this
Agreement must be in writing delivered to the other party at the following
address:
Borrower: Blue Rhino Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Financial Officer
Bank: Bank of America, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTN: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Senior Vice President
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by hand delivery, upon delivery;
B. If sent by mail, upon the earlier of the date of
receipt or five (5) days after deposit in the U.S. Mail, first class postage
prepaid.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to
Bank immediately upon demand the full amount of all costs and expenses,
including reasonable attorneys' fees, incurred by Bank in connection with
Bank's collection of, or attempts to collect, any Obligations due hereunder or
under the Notes.
12. MISCELLANEOUS. Borrower and Bank further covenant and agree
as follows, without limiting any requirement of any other Loan Document:
A. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right
granted to Bank under any Loan Document, or allowed it by law or equity shall
be cumulative of each other and may be exercised in addition to any and all
other rights of Bank, and no delay in exercising any right shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank of any right
preclude any other or future exercise thereof or the exercise of any other
right. Borrower expressly waives any presentment,
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demand, protest or other notice of any kind, including but not limited to
notice of intent to accelerate and notice of acceleration. No notice to or
demand on Borrower in any case shall, of itself, entitle Borrower to any other
or future notice or demand in similar or other circumstances.
B. APPLICABLE LAW. This Loan Agreement and the rights
and obligations of the parties hereunder shall be governed by and interpreted
in accordance with the laws of the State of North Carolina (excluding, however,
any principles of conflicts of laws) and applicable federal law.
C. AMENDMENT. No modification, consent, amendment or
waiver of any provision of this Loan Agreement, nor consent to any departure by
either party therefrom, shall be effective unless the same shall be in writing
and signed by each party, and then shall be effective only in the specified
instance and for the purpose for which given. This Loan Agreement is binding
upon Borrower, its successors and assigns, and inures to the benefit of Bank,
its successors and assigns; however, no assignment or other transfer of
Borrower's rights or obligations hereunder shall be made or be effective
without Bank's prior written consent, nor shall it relieve Borrower of any
obligations hereunder. There is no third party beneficiary of this Loan
Agreement.
D. DOCUMENTS. All documents, certificates and other
items required under this Loan Agreement to be executed and/or delivered to
Bank shall be in form and content satisfactory to Bank and its counsel.
E. PARTIAL INVALIDITY. The unenforceability or
invalidity of any provision of this Loan Agreement shall not affect the
enforceability or validity of any other provision herein and the invalidity or
unenforceability of any provision of any Loan Document to any person or
circumstance shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.
F. INDEMNIFICATION. Borrower shall indemnify, defend and
hold Bank and its successors and assigns harmless from and against any and all
claims, demands, suits, losses, damages, assessments, fines, penalties, costs
or other expenses (including reasonable attorneys' fees and court costs)
("Indemnified Damages") arising from or in any way related to any of the
transactions contemplated hereby, except Indemnified Damages occurring as a
result of willful or negligent conduct of the Bank, including but not limited
to actual or threatened damage to the environment, agency costs of
investigation, personal injury or death, or property damage, due to a release
or alleged release of Hazardous Materials, arising from Borrower's business
operations, any other property owned by Borrower or in the surface or ground
water arising from Borrower's business operations, or gaseous emissions arising
from Borrower's business operations or any other condition existing or arising
from Borrower's business operations resulting from the use or existence of
Hazardous Materials, whether such claim proves to be true or false. Borrower
further agrees that its indemnity obligations shall include, but are not
limited to, liability for damages resulting from the personal injury or death
of an employee of the Borrower, regardless of whether the Borrower has paid the
employee
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under the worker's compensation laws of any state or other similar federal or
state legislation for the protection of employees. The term "property damage"
as used in this paragraph includes, but is not limited to, damage to any real
or personal property of the Borrower, the Bank, and of any third parties. The
Borrower's obligations under this paragraph shall survive the repayment of the
Loans and foreclosure of the Collateral.
G. SURVIVABILITY. All covenants, agreements,
representations and warranties made herein or in the other Loan Documents shall
survive the making of the Loans and shall continue in full force and effect so
long as the Loans are outstanding or the obligation of the Bank to make any
advances under the Loans shall not have expired.
H. UPDATED APPRAISALS AND MAINTENANCE OF COLLATERAL
VALUE. Bank may at its option, at Borrower's expense, obtain an appraisal of
the Collateral securing payment of the Loans. The costs of each such appraisal
shall be payable by Borrower to Bank on demand. If such appraisal shows the
market value of the Collateral has declined, Borrower agrees that, upon demand
by Bank, it will immediately either pledge additional collateral in form and
substance satisfactory to Bank or make such payments as shall be necessary to
reduce the principal balance outstanding under the Loan.
13. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO, INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM
BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING
ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT
APPLICABLE, THE APPLICABLE STATE LAW). THE RULES OF PRACTICE AND PROCEDURE FOR
THE ARBITRATION OF COMMERCIAL DISPUTES OF ENDISPUTE, INC., DOING BUSINESS AS
"J.A.M.S./ENDISPUTE", OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES
SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING
A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER
SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN
THE COUNTY OF THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS
AGREEMENT AND ADMINISTERED BY J.A.M.S., WHICH WILL APPOINT AN ARBITRATOR; IF
J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION,
THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS
WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY,
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UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH
HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION
PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
AGREEMENT; OR (II) BE A WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY
12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF THE BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT
LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE
APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES
BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS AGREEMENT. NEITHER THE EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR
ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY,
INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE
CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
14. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
15. RATIFICATION OF ORIGINAL AGREEMENT.Borrower hereby
acknowledges that it is indebted to the Bank pursuant to the Original Loan
Agreement in accordance with the terms thereof, as amended prior to the date
hereof, and that there exists no defense, offset to, or claim in diminution or
avoidance of, any of its liabilities and obligations pursuant to such Original
Loan Agreement, as so amended. Borrower further ratifies and affirms the
Original Loan Agreement, as amended previously and as amended and restated by
this Second Amended and Restated Loan Agreement; agrees that there is no change
or modification thereto, except as expressly provided herein; and agrees that
the Original Loan Agreement, as amended previously and as amended and restated
hereby, shall be and constitute the Loan Agreement, with the same effect as if
this Agreement had been made on the date of the Original Loan Agreement, and
not a novation thereof.
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16. PARTICIPATIONS. Borrower acknowledges and agrees that Bank may
sell participations in the Loans to other financial institutions, up to an
amount equal to fifty percent (50%) of the aggregate principal amount of the
Loans, and Borrower agrees to cooperate with the Bank in providing such
information about the Borrower and its financial condition and business
prospects as may be reasonably requested by the Bank in connection with such
participations, which information may be shared with prospective participants,
subject to reasonable confidentiality provisions concerning any non-public
information.
IN WITNESS WHEREOF, the parties hereto have caused this Second Amended
and Restated Loan Agreement to be duly executed under seal by their duly
authorized representatives as of the date first above written.
BORROWER:
BLUE RHINO CORPORATION
ATTEST:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and CEO
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Secretary
[Corporate Seal]
BANK:
BANK OF AMERICA, N.A.
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Jr.
Title: Senior Vice President
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EXHIBIT A
BORROWING BASE AGREEMENT
This Borrowing Base Agreement between the undersigned Borrower and
Bank is the Borrowing Base Agreement as defined in that certain Second Amended
and Restated Loan and Security Agreement between Borrower and Bank dated June
30, 2000, as the same may be modified or amended from time to time (the
"Agreement"). All capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Agreement.
1. Borrowing Base. The aggregate principal amount of all amounts
from time to time advanced pursuant to the terms of the Revolver Note dated
June 30, 2000 in the principal amount of $38,000,000 and the Overline Note
dated June 30, 2000 in the principal amount of $10,000,000 (collectively, the
"Notes") shall not exceed the Maximum Amount. For purposes of calculating such
aggregate principal amount, the face amount of letters of credit issued by Bank
for the account of Borrower shall be included.
"Maximum Amount" shall mean the lesser of $38,000,000 ($48,000,000
during the period that the Overline is available) or the Borrowing Base. The
"Borrowing Base" at any time, shall be equal to 80% of Eligible Accounts
Receivable, 50% of Cylinder Inventory, 50% of Eligible Inventory, and 50% of
net Equipment, as such terms are defined herein or in the Agreement.
"Eligible Accounts Receivable" shall mean all accounts receivable of
Borrower which have been created in the ordinary course of Borrower's business
and for which Borrower's right to receive payment is absolute and not
contingent upon the fulfillment of any condition whatsoever, and shall not
include:
(i) any invoice which is more than ninety (90) days past
due;
(ii) any account for which there exists a right of set
off, defense or discount (except regular discounts allowed in the ordinary
course of business to promote prompt payment) and for which no defense or
counterclaim has been asserted;
(iii) any account which represents an obligation of any
local, state or federal governmental agency or entity;
(iv) any account which arises out of a contract or order
which, by its terms, forbids or makes void or unenforceable any assignment by
Borrower to Bank of the account receivable arising with respect thereto;
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(v) any account arising from a "sale on approval," "sale
or return," "consignment," or subject to any other repurchase or return
agreement;
(vi) any account which represents an obligation of a
customer which is not a resident of the United States or its territories unless
such account is supported by a letter of credit in form and substance
acceptable to Bank;
(vii) any account which arises from the sale or lease to or
performance of services for, or represents an obligation of, an employee,
affiliate, partner, parent or Subsidiary of Borrower;
(viii) any account which represents an obligation of a
customer of Borrower when 80% or more of Borrower's accounts from such customer
are not eligible pursuant to the foregoing formula; and
(ix) any unapplied credits over 90 days old.
"Accounts Receivable" shall mean all of the Borrower's accounts,
instruments, contract rights, chattel paper, document, and general intangibles
arising from the sale of goods and/or the rendition of services by the Borrower
in the ordinary course of business, and the proceeds thereof and all security
and guaranties therefor, whether now existing or hereafter created, and all
returned, reclaimed or repossessed goods, and all books and records pertaining
to the foregoing.
"Cylinder Inventory" shall mean all non-obsolete cylinder inventory of
Borrower or USA Leasing, LLC, a guarantor of the loans to Borrower, which is
under lease to third party lessees.
"Eligible Inventory" shall mean all non-obsolete inventory of Borrower
(other than Cylinder Inventory) that is in good condition and currently salable
and does not include any work in process, parts or supplies, inventory not in
the possession of Borrower, or inventory held on consignment.
2. Advances. The amounts of advances under the Notes shall be
determined consistent with the value of the Eligible Accounts Receivable, the
Cylinder Inventory, the Eligible Inventory and the Equipment, taking into
account all fluctuations of the value thereof. The Bank shall be under no
obligation to make any advance to Borrower in excess of the limitations stated
above.
3. Reporting. In addition to any reporting requirements required
under the Loan Agreement to which this Borrowing Base Agreement is attached,
the Borrower will submit the following in form and substance satisfactory to
Bank:
(i) Accounts Receivable Aging. Not later than thirty (30)
days after and as the end of each month, a listing of accounts receivable aged
from date of invoice.
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(ii) Monthly Borrowing Base Certificate. Not later than
thirty (30) days after the end of each month, Borrower will submit a Borrowing
Base Certificate in the form attached hereto as Exhibit A-1.
(iii) Seasonal Borrowing Base Certificate. At the time of
any advance request under the Notes during the period June 1 through November
30 of each year, a Borrowing Base Certificate in the form attached hereto as
Exhibit A-1.
4. [x] Lock Box Arrangement. Bank and Borrower shall, upon
request of Bank, establish and maintain one or more special lock box or blocked
accounts for the collection of the Accounts Receivables. Each such special
account shall be with a bank satisfactory to the Bank (which may be an
affiliate of the Bank) and shall be subject to the Bank's standard form
agreement. Any checks or other remittances against Accounts Receivables which
are received by the Borrower shall be held in trust for the Bank and turned
over by the Borrower to the Bank or to a person designated by the Bank in the
identical form received (except for any necessary endorsement) as speedily as
possible.
5. Mandatory Payment. In the event the aggregate principal
outstanding balance of advances under the Notes exceeds the Maximum Amount,
Borrower shall immediately and without notice or demand of any kind, make such
payments as shall be necessary to reduce the principal balance of the Notes
below the Maximum Amount.
BLUE RHINO CORPORATION BANK OF AMERICA, N.A.
By: (Seal) By: (Seal)
-------------------------- -------------------------
Name: Name:
------------------------ -----------------------
Title: Title:
----------------------- ----------------------
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EXHIBIT A-1
BORROWING BASE CERTIFICATE
Status as of _______________, 20__.
In accordance with the terms of the Borrowing Base Agreement attached as
Exhibit A to that Second Amended and Restated Loan Agreement dated June 30,
2000, by and between Blue Rhino Corporation and Bank of America, N.A., we
hereby represent and warrant as follows:
1. Total Accounts Receivable $____________
2. Less ineligible accounts receivable
(as set forth in the Borrowing Base
Agreement) $____________
3. Eligible Accounts Receivable $____________
4. 80% of Eligible Accounts Receivable, $____________
5. 50% of Cylinder Inventory
6. 50% of Eligible Inventory $____________
7. 50% of Equipment (net) $____________
8. Maximum Loan amount $__,000,000.00
[$38,000,000 or $48,000,000, as applicable]
9. Outstanding Loan balance as of report date $____________
10. Outstanding letters of credit (face amount) $____________
11. Available for further advances (lesser of
sum of line 4+5+6+7 or line 8, minus
sum of line 9 and 10) $____________
12. If line 11 is negative, amount to be
repaid immediately to Bank $____________
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The undersigned does hereby certify that the foregoing is true and
correct. The undersigned does further acknowledge that the Bank is relying upon
this certificate and any supporting documents to grant or continue to grant
credit to it, and further warrants and represents that no event of default has
occurred, or would, with the passage of time or the giving of notice, or both,
occur under the above-referenced Loan Agreement.
BLUE RHINO CORPORATION
By:
--------------------------------
Title:
----------------------------
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EXHIBIT B
PERFORMANCE PRICING GRID
Applicable LIBOR Margin:
The Applicable LIBOR Margin will be a function of the Borrower's Funded Debt to
EBITDA ratio as defined in the Second Amended and Restated Loan Agreement. The
calculation and any change in the Applicable LIBOR Margin shall take place on
the first day of the month immediately following receipt of Form 10-Q or Form
10-K of the Borrower. The Applicable LIBOR Margins are as follows:
----------------------------------------------------------------------------------------------
Revolver and Overline Term Loan
----------------------------------------------------------------------------------------------
Funded Debt to EBITDA Ratio Applicable LIBOR Margin
----------------------------------------------------------------------------------------------
> 3.75 275 BP 310 BP
-
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
> 3.00 to 1.0 but < 3.50 to 1.0 250 BP 285 BP
-
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
> 2.50 to 1.0 but < 3.00 to 1.0 225 BP 260 BP
-
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
>2.00 to 1.0 but < 2.50 to 1.0 200 ▇▇ ▇▇▇ ▇▇
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
>1.50 to 1.0 but < 2.00 to 1.0 175 ▇▇ ▇▇▇ ▇▇
-
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
< 1.50 to 1.0 150 ▇▇ ▇▇▇ ▇▇
-
----------------------------------------------------------------------------------------------
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EXHIBIT C
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 6(B)(iv)
of the Second Amended and Restated Loan Agreement dated as of June 30, 2000
(together with all amendments and modifications, if any, from time to time made
thereto, the "Loan Agreement"), between Blue Rhino Corporation (the "Borrower")
and Bank of America, N.A. The covenants set forth below apply to the Borrower
under the Loan Agreement. Unless otherwise defined, terms used herein
(including the attachments hereto) have the meanings provided in the Loan
Agreement.
The undersigned, being the duly elected, qualified and acting Chief
Financial Officer of the Borrower, on behalf of the Borrower and solely in his
or her capacity as an officer of the Borrower, hereby certifies and warrants
that:
1. He/she is the Chief Financial Officer of the Borrower and
that, as such, he/she is authorized to execute this certificate on behalf of
the Borrower.
2. As of ________________, 20____:
(a) Total liabilities divided by Tangible Net Worth was
___ to one;
(b) Funded Debt to EBITDA for the three months ending as
of such date was ___ to one;
(c) Borrower's Cash Flow Coverage Ratio was ___ to one;
(d) The Borrower was not in default of any of the
provisions of the Loan Agreement during the period
as to which this Compliance Certificate relates;
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate, this ______ day of ______________, 20____.
BLUE RHINO CORPORATION
By:
----------------------------
Title: Chief Financial Officer
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EXHIBIT D
SCHEDULE OF LITIGATION
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