EXHIBIT 10.3
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COLLATERAL AGREEMENT
dated as of November 20, 2002
by and among
BLUE RHINO CORPORATION,
and certain of its Subsidiaries
as Grantors,
in favor of
BANK OF AMERICA, N.A.,
as Administrative Agent
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TABLE OF CONTENTS
ARTICLE I. DEFINED TERMS.........................................................................................1
1.01 Terms Defined in the Uniform Commercial Code....................................................1
1.02 Defined Terms...................................................................................1
1.03 Other Definitional Provisions...................................................................5
ARTICLE II. SECURITY INTEREST....................................................................................5
2.01 Grant of Security Interest......................................................................5
2.02 Grantors Remain Liable..........................................................................6
ARTICLE III. REPRESENTATIONS AND WARRANTIES......................................................................6
3.01 Existence; Qualification and Power; Compliance with Laws........................................6
3.02 Authorization of Agreement; No Conflict.........................................................7
3.03 Governmental Authorization; Other Consents......................................................7
3.04 Binding Effect..................................................................................7
3.05 Perfected First Priority Liens..................................................................8
3.06 Title, No Other Liens...........................................................................8
3.07 State of Organization; Location of Inventory, Equipment and Fixtures; other
Information.....................................................................................8
3.08 Accounts........................................................................................9
3.09 Chattel Paper...................................................................................9
3.10 3.10 Commercial Tort Claims.....................................................................9
3.11 Deposit Accounts................................................................................9
3.12 Intellectual Property...........................................................................9
3.13 Inventory.......................................................................................9
3.14 Investment Property; Partnership/LLC Interests.................................................10
3.15 Farm Products..................................................................................10
ARTICLE IV. COVENANTS...........................................................................................10
4.01 Maintenance of Perfected Security Interest; Further Information................................10
4.02 Maintenance of Insurance.......................................................................10
4.03 Changes in Locations; Changes in Name or Structure.............................................11
4.04 Required Notifications.........................................................................11
4.05 4.05 Delivery Covenants........................................................................12
4.06 Control Covenants..............................................................................12
4.07 Filing Covenants...............................................................................13
4.08 Accounts.......................................................................................13
4.09 Intellectual Property..........................................................................14
4.10 Investment Property; Partnership/LLC Interests.................................................14
4.11 Equipment......................................................................................14
4.12 Vehicles.......................................................................................14
4.13 Further Assurances.............................................................................14
ARTICLE V. REMEDIAL PROVISIONS..................................................................................14
5.01 General Remedies...............................................................................14
5.02 Specific Remedies..............................................................................14
5.03 Registration Rights............................................................................14
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5.04 Application of Proceeds........................................................................14
5.05 Waiver, Deficiency.............................................................................14
ARTICLE VI. THE ADMINISTRATIVE AGENT............................................................................14
6.01 Administrative Agent's Appointment as Attorney-In-Fact.........................................14
6.02 Duty of Administrative Agent...................................................................14
6.03 Authority of Administrative Agent..............................................................14
ARTICLE VII. MISCELLANEOUS......................................................................................14
7.01 Amendments in Writing..........................................................................14
7.02 Notices........................................................................................14
7.03 No Waiver by Course of Conduct, Cumulative Remedies............................................14
7.04 Enforcement Expenses, Indemnification..........................................................14
7.05 Governing Law; Consent to Jurisdiction.........................................................14
7.06 Waiver of Jury Trial...........................................................................14
7.07 Successors and Assigns.........................................................................14
7.08 Set-Off........................................................................................14
7.09 Counterparts...................................................................................14
7.10 Severability...................................................................................14
7.11 Section Heading................................................................................14
7.12 Integration....................................................................................14
7.13 Acknowledgements...............................................................................14
7.14 Additional Grantors............................................................................14
7.15 Releases.......................................................................................14
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EXHIBITS:
Exhibit A Form of Perfection Certificate
SCHEDULES:
Schedule 3.07 Jurisdiction of Organization; Taxpayer Identification Number;
Registered Organization Number; Mailing Address; Chief
Executive Office and other Locations
Schedule 3.10 Commercial Tort Claims
Schedule 3.09 Chattel Paper
Schedule 3.11 Deposit Accounts
Schedule 3.12 Intellectual Property
Schedule 3.14 Investment Property and Partnership/LLC Interests
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COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (this "Agreement"), dated as of November 20,
2002, by and among BLUE RHINO CORPORATION, a Delaware corporation (the
"Borrower"), certain of its Subsidiaries as identified on the signature pages
hereto and any Additional Grantor (as defined below) who may become party to
this Agreement (such Subsidiaries and Additional Grantors, collectively, with
the Borrower, the "Grantors"), in favor of BANK OF AMERICA, N.A., as
Administrative Agent (in such capacity, the "Administrative Agent") for the
ratable benefit of the banks and other financial institutions (the "Lenders")
from time to time parties to the Credit Agreement, dated as of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), by and among the Borrower, the Lenders, and the
Administrative Agent.
Pursuant to the Credit Agreement, the Lenders have agreed to make
Credit Extensions to the Borrower upon the terms and subject to the conditions
set forth therein.
It is a condition precedent to the obligation of the Lenders to make
their respective Credit Extensions to the Borrower under the Credit Agreement
that the Grantors shall have executed and delivered this Agreement to the
Administrative Agent, for the ratable benefit of itself and the Lenders.
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective Credit
Extensions to the Borrowers thereunder, each Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of itself and the Lenders, as
follows:
ARTICLE I.
DEFINED TERMS
1.01 TERMS DEFINED IN THE UNIFORM COMMERCIAL CODE.
(a) The following terms when used in this Agreement shall have the
meanings assigned to them in the UCC (as defined in Section 1.02 below) as in
effect from time to time: "Account", "Account Debtor", "Authenticate",
"Certificated Security", "Chattel Paper"; "Commercial Tort Claim", "Deposit
Account", "Documents", "Electronic Chattel Paper", "Equipment", "Fixture",
"General Intangible", "Instrument", "Inventory", "Investment Property",
"Issuer", "Letter of Credit Rights", "Proceeds", "Record", "Securities
Entitlement", "Securities Intermediary", "Security Account", "Supporting
Obligation", "Tangible Chattel Paper", and "Uncertificated Security".
(b) Terms defined in the UCC and not otherwise defined herein or in the
Credit Agreement shall have the meaning assigned in the UCC as in effect from
time to time.
1.02 DEFINED TERMS. The following terms when used in this Agreement
shall have the meanings assigned to them below:
"Additional Grantor" means each Subsidiary of the Borrower which
hereafter becomes a Grantor pursuant to Section 7.14 hereof and Section 7.15 of
the Credit Agreement.
"Agreement" means this Collateral Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Insolvency Laws" means all Laws governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 547, 548 and 550 and
other "avoidance" provisions of Title 11 of the United States Code).
"Assignment of Claims Act" means the Assignment of Claims Act of 1940
(41 U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727),
including all amendments thereto and regulations promulgated thereunder.
"Collateral" shall have the meaning assigned thereto in Section 2.01.
"Collateral Account" means any collateral account established by the
Administrative Agent as provided in Section 5.02.
"Control" means the manner in which "control" is achieved under the UCC
with respect, with respect to any Collateral for which the UCC specifies a
method of achieving "control".
"Controlled Depository" shall have the meaning assigned thereto in
Section 4.06.
"Copyrights" means collectively, all of the following of any Grantor:
(a) all copyrights, rights and interests in copyrights, works protectable by
copyright, copyright registrations and copyright applications anywhere in the
world, including, without limitation, those listed on Schedule 3.12 hereto, (b)
all reissues, extensions, continuations (in whole or in part) and renewals of
any of the foregoing, (c) all income, royalties, damages and payments now or
hereafter due and/or payable under any of the foregoing or with respect to any
of the foregoing, including, without limitation, damages or payments for past or
future infringements of any of the foregoing, (d) the right to ▇▇▇ for past,
present and future infringements of any of the foregoing and (e) all rights
corresponding to any of the foregoing throughout the world.
"Copyright Licenses" means any written agreement naming any Grantor as
licensor or licensee, including, without limitation, those listed in Schedule
3.12, granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
"Effective Endorsement and Assignment" means, with respect to any
specific type of Collateral, all such endorsements, assignments and other
instruments of transfer reasonable requested by the Administrative Agent with
respect to the Security Interest granted in such Collateral, and in each case,
in form and substance satisfactory to the Administrative Agent.
"Exempted Deposit Account" means any operating Deposit Account created
in the ordinary course of business; provided that (a) no more than $50,000 in
the aggregate is deposited in all such Deposit Accounts at any time and (b) the
applicable Grantor provides written notice to the Administrative Agent within
thirty (30) days of the creation of any such Deposit Account.
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"Exempted Short Term Investment" means, any Investment permitted
pursuant to Section 8.02(a) of the Credit Agreement; provided that (a) such
Investment matures within seven (7) days and (b) the aggregate amount of all
such Investments outstanding at any time does not exceed $100,000.
"Government Contract" means a contract between any Grantor and an
agency, department or instrumentality of the United States or any state,
municipal or local Governmental Authority located in the United States.
"Guarantors" means the collective reference to each Person executing a
Guaranty Agreement.
"Guaranty Agreement" shall have the meaning assigned thereto in the
Credit Agreement.
"Intellectual Property" means collectively, all of the following of any
Grantor: (a) all systems software, applications software and internet rights,
including, without limitation, screen displays and formats, internet domain
names, web sites (including web links), program structures, sequence and
organization, all documentation for such software, including, without
limitation, user manuals, flowcharts, programmer's notes, functional
specifications, and operations manuals, all formulas, processes, ideas and
know-how embodied in any of the foregoing, and all program materials,
flowcharts, notes and outlines created in connection with any of the foregoing,
whether or not patentable or, copyrightable, (b) concepts, discoveries,
improvements and ideas, (c) any useful information relating to the items
described in clause (a) or (b), including know-how, technology, engineering
drawings, reports, design information, trade secrets, practices, laboratory
notebooks, specifications, test procedures, maintenance manuals, research,
development, manufacturing, marketing, merchandising, selling, purchasing and
accounting, (d) Patents and Patent Licenses, Copyrights and Copyright Licenses,
Trademarks and Trademark Licenses, and (e) other licenses to use any of the
items described in the foregoing clauses (a), (b), (c) and (d) or any other
similar items of such Grantor necessary for the conduct of its business.
"Obligations" means with respect to the Borrower, the meaning assigned
thereto in the Credit Agreement and with respect to each Guarantor, the
obligations of such Guarantor under the Guaranty Agreement executed by such
Guarantor.
"Partnership/LLC Interests" means, with respect to any Grantor, the
entire partnership, membership interest or limited liability company interest,
as applicable, of such Grantor in each partnership, limited partnership or
limited liability company owned thereby, including, without limitation, such
Grantor's capital account, its interest as a partner or member, as applicable,
in the net cash flow, net profit and net loss, and items of income, gain, loss,
deduction and credit of any such partnership, limited partnership or limited
liability company, as applicable, such Grantor's interest in all distributions
made or to be made by any such partnership, limited partnership or limited
liability company, as applicable, to such Grantor and all of the other economic
rights, titles and interests of such Grantor as a partner or member, as
applicable, of any such partnership, limited partnership or limited liability
company, as applicable, whether set forth in the partnership agreement or
membership agreement, as applicable, of such partnership,
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limited partnership or, limited liability company, as applicable, by separate
agreement or otherwise.
"Patents" means collectively, all of the following of any Grantor: (a)
all patents, rights and interests in patents, patentable inventions and patent
applications anywhere in the world, including, without limitation, those listed
on Schedule 3.12 hereto, (b) all reissues, extensions, continuations (in whole
or in part) and renewals of any of the foregoing, (c) all income, royalties,
damages or payments now or hereafter due and/or payable under any of the
foregoing or with respect to any of the foregoing, including, without
limitation, damages or payments for past or future infringements of any of the
foregoing, (d) the right to ▇▇▇ for past, present and future infringements of
any of the foregoing and (e) all rights corresponding to any of the foregoing
throughout the world.
"Patent License" means all agreements now or hereafter in existence,
whether written or oral, providing for the grant by or to any Grantor of any
right to manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to in
Schedule 3.12 hereto.
"Perfection Certificate" means the perfection certificate dated as of
even date herewith, substantially in the form of Exhibit A attached hereto, and
otherwise in form and substance satisfactory to the Administrative Agent, and
duly certified by an officer, partner or member, as applicable, of each Grantor.
"Permitted Liens" shall have the meaning assigned thereto in the Credit
Agreement.
"Securities Act" means the Securities Act of 1933, including all
amendments thereto and regulations promulgated thereunder.
"Security Interests" means the security interests granted pursuant to
Article II, as well as all other security interests created or assigned as
additional security for the Obligations pursuant to the provisions of the Credit
Agreement.
"Subsidiary Issuer" means any Issuer of Investment Property or any
Partnership/LLC Interests, which such Issuer is a direct or indirect Subsidiary
of the Borrower.
"Trademarks" means collectively, all of the following of any Grantor:
(a) all trademarks, rights and interests in trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which any
of the foregoing have appeared or appear, all registrations and recordings
thereof, and all applications in connection therewith anywhere in the world,
including, without limitation, those, listed on Schedule 3.12 hereto, (b) all
reissues, extensions, continuations (in whole or in part) and renewals of any of
the foregoing, (c) all income, royalties, damages and payments now or hereafter
due and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past or future
infringements of any of the foregoing, (d) the right to ▇▇▇ for past, present
and future infringements of any of the foregoing and (e) all rights
corresponding to any of the foregoing throughout the world.
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"Trademark License" means any agreement now or hereafter in existence,
whether written or oral, providing for the grant by or to any Grantor of any
right to use any Trademark, including, without limitation, any of the foregoing
referred to in Schedule 3.12.
"UCC" means the Uniform Commercial Code as in effect in the State of
North Carolina, as amended or modified from time to time.
"Vehicles" means all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title under the
laws of any state and all tires all other appurtenances to any of the foregoing.
1.03 OTHER DEFINITIONAL PROVISIONS. Terms defined in the Credit
Agreement and not otherwise defined herein shall have the meaning assigned
thereto in the Credit Agreement. The words "hereof," "herein", "hereto" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified. The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms. Where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor's Collateral or the
relevant part thereof.
ARTICLE II.
SECURITY INTEREST
2.01 GRANT OF SECURITY INTEREST. Each Grantor hereby grants, pledges
and collaterally assigns to the Administrative Agent, for the ratable benefit of
itself and the Lenders, a security interest in, all of such Grantor's right,
title and interest in the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest, and wherever located or deemed
located (collectively, the "Collateral"), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Commercial Tort Claims identified on Schedule 3.10;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all General Intangibles;
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(i) all Instruments;
(j) all Intellectual Property;
(k) all Inventory;
(l) all Investment Property;
(m) all Letter of Credit Rights;
(n) all Vehicles;
(o) all other personal property not otherwise described above;
(p) all books and records pertaining to the Collateral; and
(q) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and Supporting
Obligations (as now or hereafter defined in the UCC) given by any Person with
respect to any of the foregoing.
provided that any Security Interest on any capital stock or other ownership
interests issued by any Foreign Subsidiary shall be limited to 65% of all issued
and outstanding shares of all classes of capital stock or other ownership
interests of such Foreign Subsidiary.
2.02 GRANTORS REMAIN LIABLE. Anything herein to the contrary
notwithstanding: (a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Administrative Agent of any
of the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral, (c)
neither the Administrative Agent nor any Lender shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, nor shall the Administrative Agent or any Lender be
obligated to perform any of the obligations or duties of any Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder, and (d) neither the Administrative Agent nor any Lender shall have
any liability in contract or tort for any Grantor's acts or omissions.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective Credit
Extensions to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
3.01 EXISTENCE; QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Each
Grantor (a) is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses,
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authorizations, consents and approvals to (i) own its assets and carry on its
business as now being conducted and hereafter proposed to be conducted except
where the absence of any such license, authorization, consent or approval would
not reasonably be expected to have a Material Adverse Effect and (ii) execute,
deliver and perform its obligations under this Agreement, (c) is duly qualified
and is licensed and in good standing under the Laws of each jurisdiction where
its ownership, lease or operation of properties or the conduct of its business
requires such qualification or license except where the failure to so qualify,
be licensed or be in good standing, would not reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Laws except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect.
3.02 AUTHORIZATION OF AGREEMENT; NO CONFLICT. The execution, delivery
and performance by each Grantor of this Agreement have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(a) contravene the terms of any of such Grantor's Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under (other than the Security Interests and Permitted Liens), (i) any
Contractual Obligation to which such Grantor is a party which such conflict,
breach or contravention would not reasonably be expected to have a Material
Adverse Effect or (ii) any order, injunction, writ or decree of any Governmental
Authority or any arbitral award to which such Grantor or its property is subject
which would reasonably be expected to have a Material Adverse Effect; or (c)
violate any Law which would reasonably be expected to have a Material Adverse
Effect.
3.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.
No approval, consent, exemption, authorization, or other action by, or notice
to, or filing with, any Governmental Authority or any other Person is necessary
or required in connection with the execution, delivery or performance by, or
enforcement against, any Grantor of this Agreement, except (a) as may be
required by Laws affecting the offering and sale of securities generally, (b)
filings with the United States Copyright Office and/or the United States Patent
and Trademark Office and (c) filings under the UCC and/or the Assignment of
Claims Act. Each of the Grantors (x) has all Governmental Approvals required by
any applicable Law for it to conduct its business, each of which is in full
force and effect, is final and not subject to review on appeal and is not the
subject of any pending or, to the best of its knowledge, threatened attack by
direct or collateral proceeding, except where the absence of such Governmental
Approval would not reasonably be expected to have a Material Adverse Effect, (y)
is in compliance with each Governmental Approval applicable to it and in
compliance with all other applicable Laws relating to it or any of its
respective properties, in each case except where the failure to so comply would
not reasonably be expected to have a Material Adverse Effect and (z) has timely
filed all material reports, documents and other materials required to be filed
by it under all applicable Laws with any Governmental Authority and has retained
all material records and documents required to be retained by it under
applicable Law.
3.04 BINDING EFFECT. This Agreement has been duly executed and
delivered by each Grantor. This Agreement constitutes a legal, valid and binding
obligation of each Grantor, enforceable against each Grantor in accordance with
its terms.
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3.05 PERFECTED FIRST PRIORITY LIENS. Each financing statement naming
any Grantor as a debtor is in appropriate form for filing in the appropriate
filing offices of the states specified on Schedule 3.07. The Security Interests
granted pursuant to this Agreement (a) constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of itself and the Lenders, as collateral security for the
Obligations, enforceable in accordance with the terms hereof, against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Permitted Liens.
3.06 TITLE, NO OTHER LIENS. Except for the Security Interests and
leases of Cylinder Inventory to third party distributors, each Grantor owns each
item of the Collateral free and clear of any and all Liens or claims other than
Permitted Liens. No financing statement under the UCC of any state which names a
Grantor as debtor or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders, pursuant to this Agreement or in connection with
Permitted Liens. No Collateral is in the possession or Control of any Person
asserting any claim thereto or security interest therein, except that (a) the
Administrative Agent or its designee may have possession or Control of
Collateral as contemplated hereby, (b) a depositary bank may have Control of a
Deposit Account owned by a Grantor at such depositary bank and a Securities
Intermediary may have Control over a Securities Account owned by a Grantor at
such Securities Intermediary, in each case subject to the terms of any Deposit
Account Control Agreement or Securities Control Agreement, as applicable, in
favor of the Administrative Agent, and (c) a bailee, consignee, third party
distributors (pursuant to leases of Cylinder Inventory) or other Person may have
possession of the Collateral as contemplated by, and so long as, the applicable
Grantors have complied to the satisfaction of the Administrative Agent with the
applicable provisions of Section 4.06.
3.07 STATE OF ORGANIZATION; LOCATION OF INVENTORY, EQUIPMENT AND
FIXTURES; OTHER INFORMATION.
(a) Each Grantor was organized and remains organized under the laws of
the state identified on Schedule 3.07 under such Grantor's name. The taxpayer
identification number and Registered Organization number of each Grantor is set
forth on Schedule 3.07 under such Grantor's name.
(b) All Collateral consisting of Inventory, Equipment and Fixtures
(whether now owned of hereafter acquired) is (or will be) located at the
locations identified on Schedule 3.07 (as such Schedule 3.07 may be updated from
time to time), except as otherwise permitted hereunder. Upon the request of the
Administrative Agent (a) no more than once per year if no Default or Event of
Default has occurred and is continuing and (b) at any time during the occurrence
and continuation of a Default or Event of Default, the Borrower shall promptly
furnish a list of all addresses where Inventory is located as of the date of
such request.
(c) The mailing address, chief place of business, chief executive
office and office where each Grantor keeps its books and records relating to the
Accounts, Documents, General Intangibles, Instruments and Investment Property in
which it has any interest is located at the locations specified on Schedule 3.07
under such Grantor's name. No Grantor has any other
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places of business except those separately set forth on Schedule 3.07 under such
Grantor's name. No Grantor does business nor has done business during the past
five years under any trade name or fictitious business name except as disclosed
on Schedule 3.07 under such Grantor's name. Except as disclosed on Schedule 3.07
under such Grantors name, no Grantor has acquired assets from any Person, other
than assets acquired in the ordinary course of such Grantor's business, during
the past five years.
3.08 ACCOUNTS. Each existing Account constitutes, and each hereafter
arising Account will constitute, the legally valid and binding obligation of the
applicable Account Debtor. The amount represented by each Grantor to
Administrative Agent as owing by each Account Debtor is, or will be, the correct
amount actually and unconditionally owing, except for customary discounts and
allowances where applicable. No Account Debtor has any defense, set-off, claim
or counterclaim against any Grantor that can be asserted against Administrative
Agent, whether in any proceeding to enforce Administrative Agent's rights in the
Collateral or otherwise except defenses, setoffs, claims or counterclaims that
are not, in the aggregate, material to the value of the Accounts. None of the
Accounts is, nor will any hereafter arising Account be, evidenced by a
promissory note or other Instrument other than a check. None of the Accounts
arises from a Government Contract.
3.09 CHATTEL PAPER. Except as set forth on Schedule 3.09, as of the
date hereof, no Grantor holds any Chattel Paper in the ordinary course of its
business.
3.10 3.10 COMMERCIAL TORT CLAIMS. As of the date hereof, all Commercial
Tort Claims owned by any Grantor are listed on Schedule 3.10.
3.11 DEPOSIT ACCOUNTS. As of the date hereof, all Deposit Accounts
(including, without limitation, cash management accounts that are Deposit
Accounts) owned by any Grantor are listed on Schedule 3.11.
3.12 INTELLECTUAL PROPERTY.
(a) All United States Copyright registrations, Copyright applications,
issued Patents, Trademark registrations and Trademark applications owned by any
Grantor in its own name on the date hereof is listed on Schedule 3.12.
(b) Except as set forth in Schedule 3.12 on the date hereof, none of
the Intellectual Property owned by any Grantor is the subject of any written
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor, except as could not reasonably be expected to have a Material
Adverse Effect.
3.13 INVENTORY. Collateral consisting of Inventory is of good and
merchantable quality, free from any material defects. To the knowledge of each
Grantor, none of such Inventory is subject to any licensing, Patent, Trademark,
trade name or Copyright with any Person that restricts in any material respect
any Grantor's ability to manufacture and/or sell such Inventory. The completion
of the manufacturing process of such Inventory by a Person other than the
applicable Grantor would be permitted under any contract to which such Grantor
is a party or to which the Inventory is subject.
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3.14 INVESTMENT PROPERTY; PARTNERSHIP/LLC INTERESTS.
(a) As of the date hereof, all Investment Property (including, without
limitation, Securities Accounts and cash management accounts that are Investment
Property) and all Partnership/LLC Interests owned by any Grantor is listed on
Schedule 3.14.
(b) All Investment Property and all Partnership/LLC Interests issued by
any Subsidiary Issuer to any Grantor (i) have been duly and validly issued and,
if applicable, are fully paid and nonassessable, (ii) are beneficially owned as
of record by such Grantor and (ii) constitute all the issued and outstanding
shares of all classes of the capital stock of such Subsidiary Issuer issued to
such Grantor.
3.15 FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
ARTICLE IV.
COVENANTS
Until the Obligations shall have been paid in full and the Commitments
terminated, unless consent has been obtained in the manner provided for in
Section 7.01, each Grantor covenants and agrees that:
4.01 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER INFORMATION.
(a) Each Grantor shall maintain the Security Interest created by this
Agreement as a perfected Security Interest having at least the priority
described in Section 3.04 and shall defend such Security Interest against the
claims and demands of all Persons whomsoever.
(b) Each Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably request, all in
reasonable detail.
4.02 MAINTENANCE OF INSURANCE.
(a) Each Grantor will maintain, with financially sound and reputable
companies, insurance policies (i) insuring the Collateral against loss by fire,
explosion, theft, fraud and such other casualties, including business
interruption, as may be reasonably satisfactory to the Administrative Agent in
amounts and with deductibles at least as favorable as those generally maintained
by businesses of similar size engaged in similar activities (after giving effect
to any self-insurance in an amount not to exceed (a) $500,000 per each
occurrence and (b) $3,000,000 in the aggregate) and (ii) insuring such Grantor
and the Administrative Agent, for the ratable benefit of the Lenders, against
liability for hazards, risks and liability to persons and property relating to
the Collateral, in amounts and with deductibles at least as favorable as those
generally maintained by businesses of similar size engaged in similar
activities, such policies to be in such form and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the Lenders (after
giving effect to any self-insurance in an amount not to exceed (a) $500,000 per
each occurrence and (b) $3,000,000 in the aggregate).
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(b) All such insurance shall (i) name the Administrative Agent for the
ratable benefit of itself and the Lenders as loss payee (to the extent covering
risk of loss or damage to tangible property) and as an additional insured as its
interests may appear (to the extent covering any other risk), (ii) provide that
no cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least thirty (30) days after receipt by the
Administrative Agent of written notice thereof and (iii) be reasonably
satisfactory in all other respects to the Administrative Agent.
(c) Upon the request of the Administrative Agent, each Grantor shall
deliver to the Administrative Agent and the Lenders periodic reports from a
reputable insurance broker with respect to the insurance referred to in this
Section 4.02.
4.03 CHANGES IN LOCATIONS; CHANGES IN NAME OR STRUCTURE. No Grantor
will, except upon thirty (30) days' prior written notice to the Administrative
Agent and delivery to the Administrative Agent of (a) all additional financing
statements (executed if necessary for any particular filing jurisdiction) and
other instruments and documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the Security Interests and
(b) if applicable, a written supplement to the Schedules of this Agreement:
(i) permit any Deposit Account (other than any Exempted
Deposit Account so long as no Default or Event of Default has occurred and is
continuing) to be held by or at a depositary bank other than the depositary bank
that held such Deposit Account as of the date hereof as set forth on Schedule
3.11;
(ii) permit any of the Inventory (other than Cylinder
Inventory, Inventory acquired pursuant to an acquisition permitted pursuant to
Section 8.02(a) of the Credit Agreement and any Inventory excluded from the
Borrowing Base, so long as no Default or Event of Default has occurred and is
continuing), Equipment or Fixtures to be kept at a location other than those
listed on Schedule 3.07, except as otherwise permitted hereunder;
(iii) permit any Investment Property (other than Certificated
Securities delivered to the Administrative Agent pursuant to Section 4.05 and,
so long as no Default or Event of Default has occurred and is continuing, any
Exempted Short Term Investment) to be held by or at a Securities Intermediary
the Securities Intermediary that held such Investment Property as of the date
hereof as set forth on Schedule 3.14;
(iv) change its jurisdiction of organization or the location
of its chief executive office from that identified on Schedule 3.07; or
(v) change its name, identity or corporate or organizational
structure to such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement would become misleading.
4.04 REQUIRED NOTIFICATIONS. Each Grantor shall promptly notify the
Administrative Agent, in writing, of: (a) any Lien (other than the Security
Interests or Permitted Liens) on any of the Collateral which would adversely
affect the ability of the Administrative Agent to exercise any of its remedies
hereunder, (b) the occurrence of any other event which could reasonably be
expected to have a Material Adverse Effect on the aggregate value of the
Collateral or on the
11
Security Interests, (c) any Collateral which, to the knowledge of such Grantor,
constitutes a Government Contract, and (d) the acquisition or ownership by such
Grantor of any (i) Commercial Tort Claim, (ii) Deposit Account, (iii) Investment
Property after the date hereof.
4.05 4.05 DELIVERY COVENANTS. Each Grantor will deliver and pledge to
the Administrative Agent, for the ratable benefit of itself and the Lenders, all
Certificated Securities, Partnership/LLC Interests evidenced by a certificate,
negotiable Documents, Instruments, and Tangible Chattel Paper owned or held by
such Grantor, in each case, together with an Effective Endorsement and
Assignment and all Supporting Obligations, as applicable.
4.06 CONTROL COVENANTS.
(a) Each Grantor shall instruct (and otherwise use its reasonable
efforts) to cause (i) each depositary bank holding a Deposit Account (other than
any Exempted Deposit Account so long as no Default or Event of Default has
occurred and is continuing) owned by such Grantor and (ii) each Securities
Intermediary holding any Investment Property (other than a Short Term
Investment, so long as no Default or Event of Default has occurred and is
continuing) owned by such Grantor, to execute and deliver a control agreement,
sufficient to provide the Administrative Agent with Control of such Deposit
Account and otherwise in form and substance satisfactory to the Administrative
Agent (any such depositary bank executing and delivering any such control
agreement, a "Controlled Depositary", and any such Securities Intermediary
executing and delivering any such control agreement, a "Controlled
Intermediary"). In the event any such depositary bank or Securities Intermediary
refuses to execute and deliver such control agreement, the Administrative Agent,
in its sole discretion, may require the applicable Deposit Account and
Investment Property to be transferred to the Administrative Agent or a
Controlled Depositary or Controlled Intermediary, as applicable.
(b) Each Grantor will take such actions and deliver all such agreements
as are requested by the Administrative Agent to provide the Administrative Agent
with Control of all Letter of Credit Rights and Electronic Chattel Paper owned
or held by such Grantor, including, without limitation, with respect to any such
Electronic Chattel Paper, by having the Administrative Agent identified as the
assignee of the Record(s) pertaining to the single authoritative copy thereof.
(c) Each Grantor shall, with respect to any Collateral (other than
Collateral specifically subject to the provisions of Section 4.06(a) and Section
4.06(b)) in the possession or control of any consignee, warehouseman, bailee,
processor, or any other third party (other than Cylinder Inventory and related
display and sales racks in the possession or control of or consigned to Home
Depot Inc., ▇▇▇▇'▇ Companies, Inc., Sears, ▇▇▇▇▇▇▇ and Co. (including, without
limitation, Orchard Supply), Wal-Mart Stores, Inc. (including, without
limitation, Sam's Club) or KMart Corporation or a carrier transporting Inventory
in the ordinary course of business) exceeding in value $10,000 at any one
location (such Collateral exceeding such amount, the "Excess Collateral"),
notify in writing such Person of the Security Interests created hereby, use its
reasonable efforts to obtain such Person's written agreement in writing to hold
all such Collateral for the Administrative Agent's account subject to the
Administrative Agent's instructions, and cause such Person to issue and deliver
to the Administrative Agent warehouse receipts, bills of lading or any similar
documents relating to such Collateral to the Administrative
12
Agent's together with an Effective Endorsement and Assignment; provided that if
such Grantor is not able to obtain such agreement and cause the delivery of such
items, the Administrative Agent, in its sole discretion, may require such
Collateral or Excess Collateral, as applicable, to be moved to another location
specified thereby. Further, upon the request of the Administrative Agent, each
Grantor shall perfect and protect such Grantor's ownership interests in all
Inventory (other than Cylinder Inventory and other Inventory that is excluded
from the Borrowing Base so long as no Default or Event of Default has occurred
or is continuing) stored with a consignee against creditors of the consignee by
filing and maintaining financing statements against the consignee reflecting the
consignment arrangement filed in all appropriate filing offices, providing any
written notices required to notify any prior creditors of the consignee of the
consignment arrangement, and taking such other actions as may be appropriate to
perfect and protect such Grantor's interests in such inventory under Section
2-326, Section 9-103, Section 9 324 and Section 9-505 of the UCC or otherwise.
All such financing statements filed pursuant to this Section 4.06(c) shall be
assigned, on the face thereof, to the Administrative Agent, for the ratable
benefit of itself and the other Lenders.
4.07 FILING COVENANTS. Pursuant to Section 9-509 of the UCC and any
other applicable Law, each Grantor authorizes the Administrative Agent to file
or record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such Grantor
in such form and in such offices as the Administrative Agent determines
appropriate to perfect the Security Interests of the Administrative Agent under
this Agreement and any financing or continuation statements under the UCC (or
other applicable Law) in effect in any jurisdiction with respect to the Security
Interests. Such financing statements may describe the Collateral in the same
manner as described herein or may contain an indication or description of
Collateral that describes such property in any other manner as the
Administrative Agent may determine, in its sole discretion, is necessary,
advisable or prudent to ensure the perfection of the Security Interest in the
Collateral granted herein, including, without limitation, describing such
property as "all assets" or "all personal property." Further, a photographic or
other reproduction of this Agreement shall be sufficient as a financing
statement or other filing or recording document or instrument for filing or
recording in any jurisdiction. Grantor hereby authorizes, ratifies and confirms
all financing statements and other filing or recording documents or instruments
filed by Administrative Agent prior to the date of this Agreement.
4.08 ACCOUNTS.
(a) Other than in the ordinary course of business consistent with its
past practice, no Grantor will (i) grant any extension of the time of payment of
any Account, (ii) compromise or settle any Account for less than the full amount
thereof, (iii) release, wholly or partially, any Account Debtor, (iv) allow any
credit or discount whatsoever on any Account or (v) amend, supplement or modify
any Account in any manner that could, adversely affect the value thereof.
(b) Each Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of any material Account.
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(c) The Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and each Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications. At any time and from time to time, upon the
Administrative Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent -to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts.
4.09 INTELLECTUAL PROPERTY.
(a) Except as could not reasonably be expected to have a Material
Adverse Effect, each Grantor (either itself or through licensees) (i) will
continue to use each registered Trademark (owned by such Grantor) and Trademark
for which an application (owned by such Grantor) is pending, to the extent
reasonably necessary to maintain such Trademark in full force free from any
claim of abandonment for non-use, (ii) will maintain products and services
offered under such Trademark at a level substantially consistent with the
quality of such products and services as of the date hereof, (iii) will not (and
not permit any licensee or sublicensee thereof to) do any act or knowingly omit
to do any act whereby such Trademark could reasonably be expected to become
invalidated or impaired in any way, (iv) will not do any act, or knowingly omit
to do any act, whereby any issued Patent owned by such Grantor would reasonably
be expected to become forfeited, abandoned or dedicated to the public, (v) will
not (and will not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any registered Copyright owned by such
Grantor or Copyright for which an application is pending (owned by such Grantor)
could reasonably be expected to become invalidated or otherwise impaired and
(vi) will not (either itself or through licensees) do any act whereby any
material portion of the Copyrights may fall into the public domain.
(b) Each Grantor will notify the Administrative Agent and the Lenders
promptly if it knows, or has reason to know, that any application or
registration relating to any Intellectual Property owned by such Grantor may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Grantor's ownership of, or the validity
of, any Intellectual Property owned by such Grantor or such Grantor's right to
register the same or to own and maintain the same, except where any such
forfeiture, abandonment, public dedication or adverse determination or
development would not reasonably be expected to have a Material Adverse Effect.
(c) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five (5) Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have recorded,
any and all agreements, instruments, documents, and papers as the Administrative
Agent may reasonably request to evidence the
14
Administrative Agent's and the Lenders' security interest in any material
Copyright, Patent or Trademark and the goodwill and General Intangibles of such
Grantor relating thereto or represented thereby.
(d) Each Grantor will take all reasonable and necessary steps, at such
Grantor's sole cost and expense, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of the
material Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of incontestability.
(e) In the event that any material Intellectual Property owned by a
Grantor is infringed, misappropriated or diluted by a third party, the
applicable Grantor shall (i) at such Grantor's sole cost and expense, take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns of such infringement, misappropriation or
dilution.
4.10 INVESTMENT PROPERTY; PARTNERSHIP/LLC INTERESTS.
(a) Without the prior written consent of the Administrative Agent, no
Grantor will (i) vote to enable, or take any other action to permit, any Issuer
to issue any Investment Property or Partnership/LLC Interests, except for such
those additional Investment Property or Partnership/LLC Interests that will be
subject to the Security Interest granted herein in favor of the Administrative
Agent (subject to the limitation thereon set forth in the proviso at the end of
Section 2.01), or (ii) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any Investment Property or Partnership/LLC Interests or Proceeds
thereof. The Grantors will defend the right, title and interest of the
Administrative Agent in and to any Investment Property and Partnership/LLC
Interests against the claims and demands of all Persons whomsoever.
(b) If any Grantor shall become entitled to receive or shall receive
(i) any Certificated Securities (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the
ownership interests of any Issuer, whether in addition to, in substitution of,
as a conversion of, or in exchange for, any Investment Property, or otherwise in
respect thereof, or (ii) any sums paid upon or in respect of any Investment
Property upon the liquidation or dissolution of any Issuer, such Grantor shall
accept the same as the agent of the Administrative Agent and the Lenders, hold
the same in trust for the Administrative Agent and the Lenders, segregated from
other funds of such Grantor, and promptly deliver the same to the Administrative
Agent in accordance with the terms hereof.
4.11 EQUIPMENT. Each Grantor will maintain each item of Equipment in
good working order and condition (reasonable wear and tear and obsolescence
excepted), and in accordance with any manufacturer's manual, and will as quickly
as practicable provide all
15
maintenance, service and repairs necessary for such purpose and will promptly
furnish to the Administrative Agent a statement respecting any material loss or
damage to any of the Equipment.
4.12 VEHICLES. Upon the request of the Administrative Agent upon the
occurrence and during the continuance of an Event of Default, all applications
for certificates of title or ownership indicating the Administrative Agent's
first priority Lien on the Vehicle covered by such certificate, and any other
necessary documentation, shall be filed in each office in each jurisdiction
which the Administrative Agent shall deem reasonably advisable to perfect its
Liens on the Vehicles. Prior thereto, each certificate of title or ownership
relating to each Vehicle shall be maintained by the applicable Grantor in
accordance with applicable Law to reflect the ownership interest of such
Grantor.
4.13 FURTHER ASSURANCES. Upon the request of the Administrative Agent
and at the sole expense of the Grantors, each Grantor will promptly and duly
execute and deliver, and have recorded, such further instruments and documents
and take such further actions as the Administrative Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted, including, without limitation, (a)
with respect to Government Contracts, assignment agreements and notices of
assignment, in form and substance satisfactory to the Administrative Agent, duly
executed by any Grantors party to such Government Contract in compliance with
the Assignment of Claims Act (or analogous state applicable Law), and (b) all
applications, certificates, instruments, registration statements, and all other
documents and papers the Administrative Agent may reasonably request and as may
be required by law in connection with the obtaining of any consent, approval,
registration, qualification, or authorization of any Person deemed necessary or
appropriate for the effective exercise of any rights under this Agreement.
ARTICLE V.
REMEDIAL PROVISIONS
5.01 GENERAL REMEDIES. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to them in this Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the UCC or any
other applicable Law. Without limiting the generality of the foregoing, the
Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver the Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any Lender or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent may disclaim any
warranties of title, possession and quiet enjoyment. The Administrative Agent or
any Lender shall have the right upon any such public
16
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the Administrative
Agent's request, to assemble the Collateral and make it available to the
Administrative Agent at places which the Administrative Agent shall reasonably
select, whether at such Grantor's premises or elsewhere. To the extent permitted
by applicable Law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder except to the extent any such claims,
damages, or demands result solely from the gross negligence or willful
misconduct of the Administrative Agent or any Lender, in each case against whom
such claim is asserted. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least ten (10) days before such sale or other disposition.
5.02 SPECIFIC REMEDIES.
(a) The Administrative Agent hereby authorizes each Grantor to collect
such Grantor's Accounts, under the Administrative Agent's direction and control;
provided that, the Administrative Agent may curtail or terminate such authority
at any time after the occurrence and during the continuance of an Event of
Default.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) the Administrative Agent may communicate with Account
Debtors of any Account subject to a Security Interest and upon the request of
the Administrative Agent, each Grantor shall notify (such notice to be in form
and substance satisfactory to the Administrative Agent) its Account Debtors that
such Accounts have been assigned to the Administrative Agent, for the ratable
benefit of itself and the Lenders;
(ii) each Grantor shall forward to the Administrative Agent,
on the last Business Day of each week, deposit slips related to all cash, money,
checks or any other similar items of payment received by the Grantor during such
week, and, if requested by the Administrative Agent, copies of such checks or
any other similar items of payment, together with a statement showing the
application of all payments on the Collateral during such week and a collection
report with regard thereto, in form and substance satisfactory to the
Administrative Agent;
(iii) whenever any Grantor shall receive any cash, money,
checks or any other similar items of payment relating to any Collateral
(including any Proceeds of any Collateral), such Grantor agrees that it will,
within one (1) Business Day of such receipt, deposit all such items of payment
into the Collateral Account or in a Deposit Account at Controlled Depositary,
until such Grantor shall deposit such cash, money, checks or any other similar
items of payment in the Collateral Account or in a Deposit Account at a
Controlled Depositary, such Grantor shall hold such cash, money, checks or any
other similar items of payment in trust for the Administrative Agent and Lenders
and as property of the Administrative Agent and Lenders, separate from the other
funds of such Grantor, and the Administrative Agent shall have the right to
transfer or direct the transfer of the balance of each Deposit Account to the
Collateral
17
Account. All such Collateral and Proceeds of Collateral received by the
Administrative Agent hereunder shall be held by the Administrative Agent in the
Collateral Account as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section 5.04.
(iv) the Administrative Agent shall have the right to receive
any and all cash dividends, payments or distributions made in respect of any
Investment Property, or Partnership/LLC Interests or other Proceeds paid in
respect of any Investment Property, or Partnership/LLC Interests, and any or all
of any Investment Property, or Partnership/LLC Interests shall be registered in
the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (A) all voting, corporate and other
rights pertaining to such Investment Property, or Partnership/LLC Interests at
any meeting of shareholders, partners or members of the relevant Issuers and (B)
any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Investment Property, or
Partnership/LLC Interests as if it were the absolute owner thereof (including,
without limitation, the right to exchange at its discretion any and all of the
Investment Property, or Partnership/LLC Interests upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate, partnership or company structure of any Issuer or upon the
exercise by any Grantor or the Administrative Agent of any right, privilege or
option pertaining to such Investment Property, or Partnership/LLC Interests, and
in connection therewith, the right to deposit and deliver any and all of the
Investment Property, or Partnership/LLC Interests with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it; but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and the Administrative Agent and the Lenders shall not be responsible for
any failure to do so or delay in so doing. In furtherance thereof, each Grantor
hereby authorizes and instructs each Issuer with respect to any Collateral
consisting of Investment Property and Partnership/LLC Interests to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (A) states that an Event of Default has occurred and is continuing and (B)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) except as otherwise
expressly permitted hereby, pay any dividends, distributions or other payments
with respect to any Investment Property, or Partnership/LLC Interests directly
to the Administrative Agent; and
(v) the Administrative Agent shall be entitled to (but shall
not be required to): (A) do all acts which the Administrative Agent may deem
necessary or proper to protect its Security Interest granted hereunder, provided
such acts are not inconsistent with or in violation of the terms of any of the
Credit Agreement, of the other Loan Documents or applicable Law, and (B) sell,
assign or otherwise transfer any Collateral in accordance with the Credit
Agreement, the other Loan Documents and applicable Law.
(c) Unless an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have given notice to the relevant Grantor of
the Administrative Agent's intent to exercise its corresponding rights pursuant
to Section 5.02(b), each Grantor shall be permitted to receive all cash
dividends, payments or other distributions made in respect of any
18
Investment Property and Partnership/LLC Interests, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and other corporate, company and partnership rights with respect to any
Investment Property and Partnership/LLC Interests; provided that, no vote shall
be cast or other corporate, company and partnership right exercised or other
action taken which, in the Administrative Agent's reasonable judgment, would
impair the Collateral or which would result in a Default or Event of Default
under any provision of the Credit Agreement, this Agreement or any other Loan
Document.
5.03 REGISTRATION RIGHTS.
(a) [RESERVED.]
(b) Each Grantor recognizes that the Administrative Agent may be unable
to effect a public sale of any or all the Restricted Securities Collateral, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Restricted Securities Collateral for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Restricted Securities Collateral valid and binding and in
compliance with any and all other applicable Laws. Each Grantor further agrees
that a breach of any of the covenants contained in this Section 5.03 will cause
irreparable injury to the Administrative Agent and the Lenders, that the
Administrative Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every covenant contained in
this Section 5.03 shall be specifically enforceable against such Grantor, and
such Grantor hereby waives and agrees not to assert any defenses against an
action for specific performance of such covenants except for a defense that no
Event of Default has occurred under the Credit Agreement.
5.04 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Borrower and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of the Collateral
or any Proceeds of the Collateral in payment in whole or in part of the
Obligations (after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of any
of the Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys' fees and disbursements) in accordance with Section 9.03 of
the Credit Agreement. Any balance of such Proceeds remaining
19
after shall be paid over to the Borrower, on behalf of the Grantors, or to
whomsoever (if such Person is not a Grantor) may be lawfully entitled to receive
the same. Only after (i) the payment by the Administrative Agent of any other
amount required by any provision of law, including, without limitation, Section
9-610 and Section 9-615 of the UCC and (ii) the payment in full of the
Obligations and the termination of the Commitments, shall the Administrative
Agent account for the surplus, if any, to any Grantor, or to whomever may be
lawfully entitled to receive the same (if such Person is not a Grantor).
5.05 WAIVER, DEFICIENCY. Except to the extent prohibited under
applicable Law (including Section 9-602 of the UCC), each Grantor waives and
agrees not to assert any rights or privileges which it may acquire under
Sections 9-210, 9-607, 9-608, 9-610, 9-615, 9-620, 9-621, 9-623, 9-624, 9-625 or
9-627 of the UCC. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency.
ARTICLE VI.
THE ADMINISTRATIVE AGENT
6.01 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, following the occurrence and during the continuance of an Event
of Default to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor,
to do any or all of the following upon the occurrence and continuation of an
Event of Default:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any Account
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Account or with respect to any other Collateral
whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the Administrative
Agent's and the Lenders' security interest in_ such Intellectual Property and
the goodwill and General Intangibles of such Grantor relating thereto or
represented thereby;
20
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance called
for by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof,
(iv) execute, in connection with any sale provided for in this
Agreement, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (A) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative Agent
shall direct; (B) ask or demand for, collect, and receive payment of and receipt
for, any and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral; (C) sign and indorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (E) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral; (F)
settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; (G) assign any Copyright, Patent or Trademark (along
with the goodwill of the business to which any such Copyright, Patent or
Trademark pertains), for such term or terms, on such conditions, and in such
manner, as the Administrative Agent shall in its sole discretion determine; and
(H) generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at the Administrative Agent's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent's and the Lenders' Security Interests therein and to effect
the intent of this Agreement, all as fully and effectively as such Grantor might
do.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement in accordance with the provisions
of Section 6.01(a).
(c) The expenses of the Administrative Agent incurred in connection
with actions taken pursuant to the terms of this Agreement, together with
interest thereon at a rate per annum equal to the Default Rate for Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof in accordance with Section 6.01(a). All
powers, authorizations and agencies contained in this Agreement are coupled with
an interest and are irrevocable until this Agreement is terminated and the
Security Interests created hereby are released.
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6.02 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole duty
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Administrative Agent
and the Lenders hereunder are solely to protect the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any Lender to exercise any such powers. The
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
6.03 AUTHORITY OF ADMINISTRATIVE AGENT. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement to make any inquiry respecting such authority.
ARTICLE VII.
MISCELLANEOUS
7.01 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 11.01 of the Credit Agreement.
7.02 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 11.02 of the Credit Agreement.
7.03 NO WAIVER BY COURSE OF CONDUCT, CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 7.01), delay, indulgence, omission or otherwise
be deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default. No failure to exercise, nor any delay in
exercising on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative
22
Agent or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative Agent
or such Lender would otherwise have on any future occasion. The rights and
remedies herein provided are cumulative, may be exercised singly or concurrently
and are not exclusive of any other rights or remedies provided by law.
7.04 ENFORCEMENT EXPENSES, INDEMNIFICATION.
(a) Each Grantor agrees to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in connection with
enforcing or preserving any rights under this Agreement and the other Loan
Documents to which such Grantor is a party, (including, without limitation, in
connection with any workout, restructuring, bankruptcy or other similar
proceeding) including, without limitation, the reasonable fees and disbursements
of counsel to each Lender and of counsel to the Administrative Agent.
(b) Each Grantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes (in each case, subject to Section 4.01 of the Credit Agreement) which may
be payable or determined to be payable with respect to any of the Collateral or
in connection with any of the transactions contemplated by this Agreement.
(c) Each Grantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from any and all liabilities, obligations, losses,
damages, penalties, costs and expenses in connection with actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement to the extent any Grantor would be required to do so pursuant
to Section 11.05 of the Credit Agreement.
(d) The agreements in this Section 7.04 shall survive termination of
the Commitments and repayment of the Obligations and all other amounts payable
under the Credit Agreement and the other Loan Documents.
7.05 GOVERNING LAW; CONSENT TO JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NORTH CAROLINA APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ SITTING IN CHARLOTTE OR OF THE UNITED STATES FOR THE WESTERN DISTRICT
OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GRANTOR AND
THE ADMINISTRATIVE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GRANTOR AND THE
ADMINISTRATIVE AGENT IRREVOCABLY WAIVES ANY
23
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO. EACH
GRANTOR AND THE ADMINISTRATIVE AGENT WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
7.06 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
7.07 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of each
Grantor (and shall bind all Persons who become bound as a Grantor to this
Collateral Agreement), the Administrative Agent and the Lenders and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the prior
written consent of the Administrative Agent (given in accordance with Section
7.01).
7.08 SET-OFF. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Lender at any time and from time to time pursuant
to Section 11.09 of the Credit Agreement, without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Grantor to the Administrative Agent or such
Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Grantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured. The Administrative Agent and each Lender shall notify such Grantor
promptly of any such set-off and the
24
application made by the Administrative Agent or such Lender of the proceeds
thereof; provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Administrative Agent
and each Lender under this Section 7.07 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which the
Administrative Agent or such Lender may have.
7.09 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
7.10 SEVERABILITY. Any provision of this Agreement or any other Loan
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remainder of such provision or the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
7.11 SECTION HEADING. The Section headings used in this Agreement are
for ,convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
7.12 INTEGRATION. This Agreement and the other Loan Documents represent
the agreement of the Grantors, the Administrative Agent and the Lenders with
respect to the subject matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof and thereof not expressly set forth or
referred to herein or in the other Loan Documents.
7.13 ACKNOWLEDGEMENTS.
(a) Each Grantor hereby acknowledges that: (i) it has been advised by
counsel in the negotiation, execution and delivery of this Agreement and the
other Loan Documents to which it is a party, (ii) neither the Administrative
Agent nor any Lender has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand, and the
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor, and (iii) no joint venture is
created hereby or by the other Loan Documents or otherwise exists by virtue of
the transactions contemplated hereby or thereby among the Lenders or among the
Grantors and the Lenders.
(b) Each Issuer party to this Agreement acknowledges receipt of a copy
of this Agreement and agrees to be bound thereby and to comply with the terms
thereof insofar as such terms are applicable to it. Each Issuer agrees to
provide such notices to the Administrative Agent as may be necessary to give
full effect to the provisions of this Agreement.
7.14 ADDITIONAL GRANTORS. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 7.15 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of a Joinder Agreement in form and
substance satisfactory to the Administrative Agent.
25
7.15 RELEASES.
(a) At such time as the Obligations shall have been paid in full and
the Commitments have been terminated, the Collateral shall be released from the
Liens created hereby, and this Agreement and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Grantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor following
any such termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. In the event that all the capital stock of any Grantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement, then, at the request of the Borrower and at the expense of the
Grantors, such Grantor shall be released from its. obligations hereunder;
provided that the Borrower shall have delivered to the Administrative Agent, at
least ten (10) Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Grantor and the terms of
the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents.
[Signature Pages to Follow]
26
IN WITNESS WHEREOF, the parties hereto have caused this Collateral
Agreement to be executed under seal by their duly authorized officers, all as of
the day and year first written above.
BLUE RHINO CORPORATION, as Grantor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
BLUE RHINO CONSUMER PRODUCTS, LLC,
as Grantor and Issuer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Manager
USA LEASING, L.L.C., as Grantor and Issuer
Blue Rhino Corporation, Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
UNIFLAME, LLC, as Grantor and Issuer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Manager
CPD ASSOCIATES, INC., as Grantor and Issuer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
[Signature pages continue]
UNIFLAME CORPORATION, as Grantor and Issuer
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
UNI-ASIA, LTD., as an Issuer only
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: CEO/President
[Signature Pages Continue]
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President and Senior Agency Officer
EXHIBIT A
To Collateral Agreement
FORM OF PERFECTION CERTIFICATE
Pursuant to a Credit Agreement dated as of November 20, 2002 (as
amended, restated, supplemented or otherwise modified, the "Credit Agreement"),
by and among BLUE RHINO CORPORATION, a North Carolina corporation (the
"Borrower"), the lenders who are or may become a party thereto, as Lenders, and
BANK OF AMERICA, N.A., a national banking association, as Administrative Agent
for the Lenders (the "Administrative Agent"), the Borrower has entered into the
Collateral Agreement, dated as of November 20, 2002 (as amended, supplemented or
otherwise modified, the "Collateral Agreement") in favor of the Administrative
Agent for the benefit of the Lenders.
This Perfection Certificate is delivered pursuant to the Collateral
Agreement.
Each Grantor hereby certifies to the Administrative Agent and each
Lender as follows:
1. IDENTIFICATION INFORMATION.
(a) The jurisdiction of incorporation, organization or formation of
each Grantor is as follows:
(b) The location of the chief executive office of each Grantor is as
follows:(1)
(c) The exact legal name of each Grantor as it appears in its [Articles
or Certificate of Incorporation] [Formation] [or] [other applicable document
evidencing formation] is as follows:
(d) Except as set forth herein, no Grantor has changed its identity or
organizational structure in any way within the past five years.
(e) The following is a list of all other names (including trade names
or similar appellations) used by any Grantor or any of their respective
divisions or other business units at any time during the past five years:
(f) The taxpayer identification number of each Grantor is as follows:
(g) The registered organization identification number(2) of each
Grantor is as follows:
--------------
(1) For an organization which is not a registered organization (i.e. a general
partnership), the debtor's location is deemed to be its chief executive office.
(2) This is the number assigned to the registered organization by the Secretary
of State and is usually found on the time stamped copy of the organization
documents filed with the Secretary of State's office.
2. CURRENT LOCATIONS.
(a) The respective chief executive offices of each Grantor is located
at the following addresses:
Grantor Mailing Address County and State
------- --------------- ----------------
(b) The following are the only locations at which any Grantor maintains
any books or records relating to any Accounts:
Grantor Mailing Address County and State
------- --------------- ----------------
(c) The following are all the locations not identified above where the
Grantors maintain any Inventory or Equipment:
Grantor Mailing Address County and State
------- --------------- ----------------
3. UNUSUAL TRANSACTIONS. Other than as set forth below, all Accounts
have been originated by the Grantors and all Inventory and Equipment have been
acquired by the Grantors in the ordinary course of business.
4. RELIANCE. The undersigned acknowledges that the Administrative Agent
and the Lenders are entitled to rely and have, in fact, relied on the
information contained herein, and any successor or assign of the Agent or the
Lenders is entitled to rely on the information contained herein.
IN WITNESS WHEREOF, the undersigned have executed this Perfection
Certificate, this _____ day of ____________________, ____.
[GRANTOR]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
2