Exhibit 10.1
BANK OF AMERICA, N.A.
AMENDED AND RESTATED LOAN AGREEMENT
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THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") dated as of
December 9th, 1999, by and between BANK OF AMERICA, N.A., a national banking
association ("Bank") and the Borrower described below:
R E C I T A L S:
WHEREAS, Bank and Borrower are parties to that certain Loan Agreement dated
December 31, 1998 (the "BR Loan Agreement"), pursuant to which Bank made certain
loans to Borrower, as more fully described therein, including a revolving line
of credit (the "Revolver") in the original principal amount of up to $7,000,000,
and a non-revolving line of credit (the "Acquisition Line") in the principal
amount of up to $5,000,000; and
WHEREAS, on the same date, Bank and USA Leasing, L.L.C., a Delaware limited
company (the "Lessor"), entered into a Loan Agreement (the "Lessor Loan
Agreement"), pursuant to which Bank extended a non-revolving line of credit (the
"Lease Line") to Lessor in the principal amount of up to $13,000,000, which
Lease Line was personally guaranteed by the members of the Lessor (the
"Members") and by Borrower pursuant to limited guaranties (the "Guaranties");
and
WHEREAS, by that certain Amendment to Loan Agreement between the Borrower
and the Bank, dated June 14, 1999 (the "BR Loan Amendment"), the Bank agreed to
modify certain limitations on the amount of credit available under the various
loan facilities to allow Borrower to obtain additional advances under the
Revolver and the Acquisition Line, and also agreed to modify certain financial
covenants, to modify the Borrowing Base, and to make certain other changes in
the BR Loan Agreement; and
WHEREAS, pursuant to that certain Waiver Agreement among the Borrower, the
Lessor and the Bank, dated as of July 30, 1999 (the "Waiver"), the Bank agreed
to permit the sale of all of the Members' interests in the Lessor to the
Borrower, subject to certain terms and conditions, including that the Borrower
would execute an amended Guaranty of all indebtedness of the Lessor to the Bank;
and the Bank further agreed to release the limited guaranties of the Members of
the Lessor upon receipt of certain funds; and
WHEREAS, on September 21, 1999, the Borrower caused to be issued its
Convertible Note in the principal amount of $7,000,000 (such note and all other
notes issued pursuant thereto shall be referred to herein as the "Convertible
Notes"), together with certain warrants to purchase common stock of the
Borrower, payment of which Convertible Notes is subordinated to the prior
payment in full of Borrower's indebtedness to the Bank, up to a principal amount
of $25,000,000; and
WHEREAS, the Bank consented to the issuance of the Convertible Notes,
subject to certain terms and conditions, and also agreed to waive the Borrower's
compliance with certain financial covenants as of July 31, 1999; and
WHEREAS, the Borrower has now requested that the Bank agree to restructure
the existing indebtedness of the Borrower and the Lessor pursuant to the BR Loan
Agreement and the Lessor Loan Agreement; and
WHEREAS, Bank has agreed to so restructure such indebtedness, subject to
certain terms and conditions, including that the BR Loan Agreement be restated
in its entirety; and
WHEREAS, the parties hereto wish to set forth their agreement with respect
to the foregoing matters and to restate the BR Loan Agreement;
NOW, THEREFORE, in consideration of the Loans described below and the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, Bank and Borrower agree that the BR Loan Agreement is hereby
restated as follows:
1. DEFINITIONS AND REFERENCE TERMS. In addition to any other terms defined
herein, the following terms shall have the meaning set forth with respect
thereto:
A. Accounts Receivable. All of the Borrower's accounts, instruments,
contract rights, chattel paper, documents, and general intangibles arising from
the sale of goods and/or the rendition of services by the Borrower in the
ordinary course of business, and the proceeds thereof and all security and
guaranties therefor, whether now existing or hereafter created, and all
returned, reclaimed or repossessed goods, and all books and records pertaining
to the foregoing.
B. Borrower. Blue Rhino Corporation, a Delaware corporation.
C. Borrower's Address: 104 Cambridge Plaza Drive
Winston-Salem, NC 27104
D. Collateral. The property and interests in property securing
payment and performance of the Loans, as set forth in Section 3 hereof.
E. Cash Flow Coverage Ratio. The quotient of the aggregate of
Borrower's net income after tax (exclusive, however, of any non-cash gain or
loss attributable to Borrower's investment in the Bottling Company (as
hereinafter defined)), plus depreciation and amortization, plus interest
expense, minus dividends and distributions actually paid, divided by the sum of
the prior year's current maturities of long term debt (exclusive of any current
maturities of the Convertible Notes) plus current
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maturities of capital leases, plus interest expense, plus twenty percent (20%)
of the outstanding balance of the Revolver.
F. EBITDA. Earnings before interest expense, taxes, depreciation and
amortization.
G. Equipment. All machinery and equipment, including fixtures, now
owned or hereafter acquired by the Borrower.
H. Funded Debt. Debt incurred by borrowing money, specifically
excluding trade debt or accruals arising in the ordinary course of business, but
including, without limitation (i) purchase money indebtedness, (ii) the
principal portion of obligations under capital leases, and (iii) all obligations
guaranteeing or intended to guarantee any debt of any other entity, whether such
obligation is direct or indirect.
1. Hazardous Materials. All materials defined as hazardous wastes or
substances under any local, state or federal environmental laws, rules or
regulations, and petroleum, petroleum products, oil and asbestos.
i. Inventory. Means all non-obsolete inventory of Borrower of every
kind or character, wherever located, for which Borrower:
(i) has full title, free and clear of any security interest,
liens and claims whatsoever; and
(ii) has the right to convey such inventory as security for the
Obligations; and
(iii) such inventory is in first class order, condition and
repair.
K. LIBOR. The London Interbank Offered Rate for thirty-day deposits,
adjusted for applicable reserves, deposit insurance assessments and other
regulatory costs, as determined by the Bank, from time to time.
L. Loans. The loan described in Section 2 hereof and any other
existing or subsequent loan by Bank to the Borrower that is subject to this
Agreement.
M. Loan Documents. Loan Documents means this Loan Agreement and any
and all promissory notes executed by Borrower in favor of Bank and all other
documents, instruments, guaranties, certificates and agreements executed and/or
delivered by Borrower, any guarantor or third party in connection with any Loan.
N. Material Adverse Effect. Any material adverse effect on (i) the
business, assets, operations or financial or other condition of Borrower and its
subsidiaries taken as a whole, (ii) the Borrower's ability to pay the
Obligations in accordance with the terms thereof, or (iii) the Collateral or
Bank's security interest in the
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Collateral or the priority of such security interest. Without limiting the
foregoing, any adverse effect on the business, assets, operations or financial
or other condition of Borrower and its subsidiaries (if any) involving,
individually or in the aggregate, a liability of the Borrower or any of its
subsidiaries in excess of applicable insurance coverage by more than $100,000
shall be deemed to be a "Material Adverse Effect" within the meaning of the
applicable provisions of this Agreement.
O. Note. The Revolver Note, as defined herein.
P. Obligations. The Loans and all other loans, advances,
indebtedness, liabilities, obligations, covenants and duties (including post-
petition interest on the foregoing, to the extent lawful) owing, arising, due or
payable from the Borrower to the Bank of any kind or nature, present or future,
arising under this Agreement or any of the other Loan Documents (including,
without limitation any Hedge Agreement, as defined in subparagraph 2 (B) (ii)),
whether direct or indirect (including those acquired by assignment), absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising. The term includes, without limitation, all interest, charges,
reasonable expenses, reasonable fees, reasonable attorneys' fees and any other
sums chargeable to the Borrower by the Bank under this Agreement or any of the
other Loan Documents.
Q. Person. A corporation, an association, a joint venture, a limited
liability company, a partnership, an organization, a business, an individual, a
trust or a government or political subdivision thereof or any government agency
or any other legal entity.
R. Tangible Net Worth. The amount by which Borrower's total assets
exceed total liabilities in accordance with GAAP, minus (i) goodwill, (ii)
contract rights, (iii) assets representing claims on (A) shareholders,
directors, or officers or (B) Subsidiaries, and (iv) other assets constituting
intangible assets, including, without limitation, any patents, trademarks,
tradenames, copyrights or similar intellectual property.
S. Subsidiary. As to any Person, each of the Persons that directly or
indirectly, through one or more intermediaries, is controlled by such Person.
For the purpose of this definition, "control" means the possession, directly or
indirectly, of over fifty percent (50%) of the voting rights of the equity
holders of the entity, whether through the ownership of voting securities, by
contract or otherwise.
Accounting Terms. All accounting terms not specifically defined or
specified herein shall have the meanings generally attributed to such terms
under generally accepted accounting principles ("GAAP"), as in effect from time
to time, consistently applied. All financial computations made under this
Agreement for the purpose of determining compliance with the financial
requirements of this Agreement shall be made, and all financial information
required under this Agreement shall be prepared, in accordance with GAAP, as in
effect on the date hereof.
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2. LOAN. Subject to the terms of this Agreement, Bank hereby agrees to
make a loan to Borrower, as follows:
A. Revolving Line of Credit. (i) Subject to the terms hereof, Bank agrees
to extend a revolving line of credit (the "Revolver") to Borrower, in the
original principal amount of up to Twenty-Five Million Dollars ($25,000,000),
for the purpose of refinancing and increasing the Borrower's revolving line of
credit, refinancing all indebtedness of Lessor to Bank, financing Borrower's
short-term working capital needs, including but not limited to payments under
letters of credit issued for the benefit of Borrower, and financing acquisitions
by Borrower. The Revolver will be available during the period commencing on the
date hereof and continuing until August 31, 2001 (which date, as extended in
accordance with the terms hereof, shall be the "Maturity Date"). Borrower may
from time to time borrow, repay and re-borrow, subject to the Borrowing Base
Agreement attached hereto as Exhibit "A" and by reference made a part hereof,
and the Borrowing Base set forth therein (the "Borrowing Base"). Borrower shall
execute and deliver to Bank a promissory note (the "Note") in the principal
amount of $25,000,000, which Note shall bear interest and be payable in
accordance with the terms set forth hereinbelow. It is further provided that the
commitment of the Bank to continue to make the Revolver available to the
Borrower beyond the Maturity Date is subject to annual review by the Bank
(subject to and following receipt of the Borrower's annual report of audit as
provided hereinafter), and the Bank may, in its sole discretion, elect to renew
the commitment for an additional year, whereupon the Maturity Date shall be
extended to the date that is one year after the then-current Maturity Date.
(ii) Interest and Principal. Subject to the terms of subparagraph 2 (B) (i)
below, interest on the principal amount outstanding under the Revolver from time
to time shall accrue at a floating rate of thirty-day LIBOR, plus two hundred
basis points (2.00%) per annum, which rate shall change on and as of each date
LIBOR changes. Accrued interest shall be payable monthly in arrears. The
principal of the Note shall be repaid in full, if not sooner paid, on the
Maturity Date, together with all accrued but unpaid interest thereon.
(iii) Fees. Borrower shall pay to Bank a commitment fee in the amount of
$50,000 at the closing of the Revolver. Borrower shall also pay Bank, quarterly
as invoiced by Bank, an availability fee in the amount of one-quarter percent
(1/4%) of the average unused amount of the Revolver.
(iv) Collateral Security. Repayment in full of the Revolver shall be
secured by all Accounts Receivable (as such term is defined in the Borrowing
Base Agreement attached hereto), and all Inventory and Equipment of Borrower,
now owned or hereafter acquired, including all proceeds thereof. The Revolver
shall also be secured by all interests hereafter acquired by the Borrower in
real estate and any improvements thereon, or in any Person owned, in whole or in
part, by the Borrower that acquires any interest in real estate and improvements
used by the Borrower.
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(v) Administration of Accounts. (a) Borrower agrees to submit to Bank,
within thirty (30) days after the end of each month during the term of the
Revolver, a summary aged trial balance of all accounts existing as of the last
day of such month, and all inventory, in form satisfactory to the Bank. Borrower
agrees to keep accurate and complete records of its accounts, and of all
payments and collections thereof, and of all inventory.
(b) Monthly, within thirty (30) days after the end of each monthly
period, Borrower shall submit a borrowing base certificate to Bank setting forth
the amount of Borrower's Eligible Accounts Receivable (as defined in the
Borrowing Base Agreement), Eligible Inventory (as defined in the Borrowing Base
Agreement) and Equipment as of the last day of such monthly period.
(c) Whether or not an Event of Default has occurred, Borrower shall
permit Bank, including any of its officers, agents or designees, to inspect and
verify the amount of or any other matter relating to the Borrower's accounts.
Borrower agrees to cooperate fully with Bank in such inspection and verification
process. Borrower further agrees to pay or reimburse Bank for payment of all
expenses incurred to monitor, inspect and examine Borrower's accounts, up to an
amount of $5,000 per year during the term of this Agreement.
(d) Bank shall have the right at any time after the occurrence of an
Event of Default to notify any or all account debtors that Borrower's accounts
have been assigned to Bank and to collect the accounts in its name.
(vi) Guaranties. Payment in full of all indebtedness of the Borrower
pursuant to the Revolver shall be guaranteed by all of the subsidiaries of the
Borrower, including Lessor, Rhino Services, L.L.C., and CPD Associates, Inc.,
and any Subsidiary formed or acquired after the date of this Agreement, pursuant
to guaranty agreements (the "Guaranties") in form and substance satisfactory to
Bank. The Guaranty of Lessor shall be secured by a security interest in and lien
on all inventory of Lessor, now owned or hereafter acquired, including all
proceeds thereof. Lessor shall also assign to Bank all of its rights as lessor
under leases of propane cylinders, including all proceeds and lease payments
under such leases. All such inventory and leases shall be referred to herein as
the "Lessor Collateral."
B. Other Interest Rate Provisions Applicable to the Loans.
(i) The interest rate applicable to the Revolver will vary, according to
the Borrower's compliance with the Funded Debt (including the Convertible Notes)
to EBITDA ratio (as defined below), as set forth in Exhibit B attached hereto,
which ratio shall be computed by the Borrower's certified public accountants, in
a manner reasonably acceptable to the Bank. Such financial ratio shall be
calculated quarterly as of the last day of each fiscal quarter of the Borrower
and, if the threshold ratio set forth on Exhibit B is satisfied, the alternative
interest rate set forth on Exhibit B shall apply to the Revolver during the next
succeeding quarter, beginning with the first day of the month following
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receipt of the Borrower's quarterly and annual financial statements,
respectively. It is provided, however, that the Borrower must be in compliance
with all of the terms and provisions of this Agreement to receive the rates set
forth in Exhibit B.
(ii) Borrower shall also have the option to fix the interest rate on all or
any portion of the Revolver, at any time, through the use of a Hedge Agreement
purchased from the Bank at the market rate for such products. For purposes
hereof, a "Hedge Agreement" means any agreement between Borrower and Bank, or
any affiliate of Bank, now existing or hereafter entered into, which provides
for an interest rate or commodity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross-currency swap, currency option, or
any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging Borrower's exposure to fluctuations in interest
rates, currency valuations or commodity prices. Notwithstanding any other terms
of this Agreement, any loan subject to a Hedge Agreement shall be prepayable
only in accordance with, and subject to any fees imposed under, the terms of
such Hedging Agreement.
C. Information Requirements Related to Acquisitions by Borrower. Prior to
obtaining any advances under the Revolver for the purpose of financing the cost
(in whole or in part) of any acquisition (whether such acquisition is by merger
or purchase of assets), Borrower shall provide to Bank such information
concerning the proposed acquisition and the entity to be acquired (or the assets
to be purchased) as the Bank shall reasonably request. All such information
shall be treated by the Bank as confidential information, and shall not be
disclosed to or used by any other person without the express written consent of
Borrower.
3. COLLATERAL SECURITY. Payment and performance of the Note shall be
secured by the Collateral described above, and the Borrower hereby grants,
conveys, transfers and assigns to the Bank a security interest in and lien upon
all of such Collateral for such Note.
Borrower agrees and undertakes to execute and deliver to the Bank such
security agreements, pledge agreements, assignments, financing statements,
subordinations, certificates, waivers, estoppel agreements, and other
documentation, in form acceptable to the Bank, as may be requested by the Bank
in connection with the Collateral.
Borrower further agrees that it will, immediately upon the acquisition
thereof, assign and pledge to the Bank all of its ownership interest in any
entity formed to own and/or operate that certain bottling plant under
construction at Hamptonville, North Carolina (the "Bottling Company"), as
additional collateral security for the Note. Borrower will also grant Bank a
security interest in and lien upon any real property acquired after the date of
this Agreement costing in excess of $100,000, pursuant to deeds of trust,
mortgages or security deeds reasonably satisfactory to Bank, as additional
collateral security for the Note.
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4. CONDITIONS PRECEDENT. The Bank's agreement to extend the Revolver to
the Borrower is subject to the fulfillment, to the Bank's satisfaction, of all
of the following conditions:
A. Bank shall have received, on or before the date hereof (i) a copy of
the resolutions of the Board of Directors of the Borrower, certified on such
date by an officer of the Borrower, authorizing the execution and delivery of
this Agreement, the borrowings hereunder and the execution and delivery of the
Note, the other Loan Documents and the Collateral, and (ii) such additional
documents and requirements as the Bank or counsel for the Bank may reasonably
request.
B. The Borrower shall have executed and delivered all documentation for
the Loan, as requested by the Bank, which shall be in form and content
reasonably acceptable to the Bank and its counsel.
C. The Borrower shall have provided to the Bank, in form satisfactory to
the Bank, all financial and other information requested by Bank as to its
business and affairs.
D. The Borrower shall have provided to the Bank, in form and content
satisfactory to the Bank and its counsel, satisfactory evidence that the
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has the corporate and legal
authority to own its property and carry on its business as now being conducted.
E. Each of the subsidiaries of the Borrower shall have provided to the
Bank certified copies of resolutions of their governing bodies authorizing
execution and delivery of the Guaranties, and satisfactory evidence that each of
such subsidiaries is duly organized, validly existing and in good standing under
the laws of their respective states of incorporation.
F. The Bank shall have received an opinion of the Borrower's counsel with
respect to such matters and in such form as is reasonably acceptable to the Bank
and its counsel.
G. All terms and conditions of the Bank's commitment letter to the
Borrower for the Loans have been satisfied and fulfilled, to the reasonable
satisfaction of the Bank.
H. No event has occurred or failed to occur that would have a Material
Adverse Effect on the financial condition of the Borrower as set forth in its
most recent annual and quarterly financial statements and internally-prepared
monthly financial statements submitted to Bank.
1. The Borrower shall have certified that the execution of the Loan
Documents shall not cause any default under any other contract or agreement to
which the Borrower or any of its subsidiaries is subject.
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J. The Borrower shall have paid or provided for the payment of all costs
and expenses incurred in connection with the making of the Loan, including,
without limitation, the Bank's attorneys' fees and expenses.
5. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and warrants
to Bank as follows:
A. Good Standing. Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
the power and authority to own its property and to carry on its business in each
jurisdiction in which Borrower does business, and each of Borrower's
subsidiaries is duly organized, validly existing and in good standing under the
laws of the state of its organization, and has the power and authority to own
its property and carry on its business.
B. Authority and Compliance. Borrower and each of its subsidiaries
have full power and authority to execute and deliver the Loan Documents and to
incur and perform the obligations provided for therein, all of which have been
duly authorized by all proper and necessary action of the appropriate governing
body of Borrower and its subsidiaries, respectively. No consent or approval of
any public authority or other third party is required as a condition to the
validity of any Loan Document, and Borrower and each such Subsidiary, to the
best of the Borrower's knowledge after reasonable inquiry, are in compliance
with all laws and regulatory requirements to which they are subject.
C. Binding Agreement. This Agreement and the other Loan Documents
executed by Borrower and its subsidiaries constitute their valid and legally
binding obligations, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and similar laws and other laws generally
affecting the enforceability of creditors' rights and to general principles of
equity.
D. Litigation. There is no material proceeding involving Borrower or
any of its subsidiaries pending or, to the knowledge of Borrower, threatened
before any court or governmental authority, agency or arbitration authority,
which, if determined adversely to the Borrower, would have a Material Adverse
Effect on the Borrower and its subsidiaries, taken as a whole, except as
disclosed in Exhibit D attached hereto.
E. No Conflicting Agreements. There is no charter, bylaw, stock
provision, partnership agreement or other document pertaining to the
organization, power or authority of Borrower or any of its subsidiaries and no
provision of any existing agreement, mortgage, indenture or contract binding on
Borrower or any of its subsidiaries or affecting their property, which would
conflict with or in any way prevent the execution, delivery or carrying out of
the terms of this Agreement and the other Loan Documents.
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F. Ownership of Assets. Borrower and its subsidiaries have good title
to their assets, and such assets are free and clear of liens, except those
granted to Bank and as disclosed to Bank in writing prior to the date of this
Agreement.
G. Taxes. All material taxes and assessments due and payable by
Borrower and its subsidiaries have been paid or are being contested in good
faith by appropriate proceedings and Borrower and its subsidiaries have filed
all material tax returns which they are required to file.
H. Financial Statements. The financial statements of Borrower
heretofore delivered to Bank have been prepared in accordance with GAAP applied
on a consistent basis throughout the period involved and fairly present
Borrower's financial condition as of the date or dates thereof, and there has
been no material adverse change in Borrower's financial condition or operations
since October 31, 1999. To the best of its knowledge, all factual information
furnished by Borrower to Bank in connection with this Agreement and the other
Loan Documents is and will be accurate and complete on the date as of which such
information is delivered to Bank.
I. Place of Business. Borrowers chief executive office is located at:
104 Cambridge Plaza Drive, Winston-Salem, North Carolina 27104.
J. Environmental Matters. The conduct of Borrower's and its
subsidiaries' business operations does not and will not violate any federal
laws, rules or ordinances for environmental protection, regulations of the
Environmental Protection Agency, any applicable local or state law, rule,
regulation or rule of common law or any judicial interpretation thereof relating
primarily to the environment or Hazardous Materials, and Borrower and its
subsidiaries will not use or permit any other party to use any Hazardous
Materials at their places of business except such materials as are incidental to
their normal course of business, maintenance and repairs and which are handled
in compliance with all applicable environmental laws. Borrower agrees to permit
Bank, its agents, contractors and employees to enter and inspect any of
Borrower's and its subsidiaries' places of business or any of their other
property of Borrower at any reasonable time upon three (3) days prior notice for
the purposes of conducting an environmental investigation and audit (including
taking physical samples) to insure that they are complying with this covenant
and Borrower shall reimburse Bank on demand for the costs of any such
environmental investigation and audit. Borrower shall provide Bank, its agents,
contractors, employees and representatives with access to and copies of any and
all data and documents relating to or dealing with any Hazardous Materials used,
generated, manufactured, stored or disposed of by Borrower's and its
subsidiaries' business operations within five (5) days of the request therefor.
K. Year 2000 Compliance. Borrower represents that it has (i)
initiated a review and assessment of all areas within its and each of its
subsidiaries' businesses and operations (including those affected by suppliers
and vendors) that could be adversely affected by the "Year 2000 Problem" (that
is, the risk that computer applications used by Borrower or any of its
subsidiaries (or their suppliers and vendors)
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may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis and (iii) to date, implemented that plan in accordance with that
timetable. Borrower reasonably believes that all computer applications
(including those of its suppliers and vendors) that are material to its or any
of its subsidiaries' business and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that the
Borrower reasonably believes a failure to do so will not have a Material Adverse
Effect on its business, financial condition, or ability to repay the Loans.
Borrower further represents that it will promptly notify the Bank in the
event Borrower discovers or determines that any computer application (including
those of its suppliers and vendors) that is material to its or any of its
subsidiaries' businesses and operations will not be Year 2000 compliant on a
timely basis, except to the extent that the Borrower reasonably believes such
failure will not have a Material Adverse Effect on its business, financial
condition or ability to repay the Loans.
L. No Material Adverse Effect. To the best of the Borrower's
knowledge, neither this Agreement nor any of the Loan Documents, nor any
statements furnished to the Bank by or on behalf of the Borrower and its
subsidiaries in connection with the Loans or the Loan Documents, contain any
untrue statement of a material fact. To the best knowledge of the Borrower,
there is no fact that the Borrower has not disclosed to the Bank in writing that
would have a Material Adverse Effect.
M. Continuation of Representation and Warranties. All representations
and warranties made under this Agreement shall be deemed to be made at and as of
the date hereof and at and as of the date of any future advance under any Loan
(except insofar as such representations and warranties relate expressly to an
earlier date, and except for the representations and warranties in Section 6. D
and H, which shall be deemed to be made solely on the date of this Agreement).
6. AFFIRMATIVE COVENANTS. Until full payment and performance of all
Obligations of Borrower under the Loan Documents, Borrower will, unless Bank
consents otherwise in writing (and without limiting any requirement of any other
Loan Document):
A. Financial Condition. Maintain Borrower's financial condition as
follows, determined in accordance with GAAP applied on a consistent basis
throughout the period involved, except to the extent modified by the following
definitions:
(i) Maintain a ratio of total liabilities (exclusive of the
Convertible Notes) to Tangible Net Worth plus the balance of the Convertible
Notes of 1.50 for the period January 31, 2000 to October 30, 2001, and 1.25 at
all times from and after October 31, 2001;
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(ii) Maintain a ratio of Funded Debt (exclusive of the Convertible
Notes) to EBITDA, as follows:
(a) not greater than 3.00 to one from April 30, 2000 to July 30, 2000;
(b) not greater than 2.50 to one from July 31, 2000 to January 30,
2001;
(c) not greater than 2.00 to one from January 31, 2001 to July 30,
2001; and
(d) not greater than 1.75 from and after July 31, 2001.
(iii) Maintain a ratio of Funded Debt (including the Convertible
Notes) to EBITDA, as follows:
(a) not greater than 3.50 to one from April 30, 2000 to July 30, 2000;
(b) not greater than 3.00 to one from July 31, 2000 to January 30,
2001;
(c) not greater than 2.50 to one from January 31, 2001 to July 30,
2001; and
(d) not greater than 2.00 from and after July 31, 2001.
(iv) Maintain a Cash Flow Coverage Ratio of not less than 1.2 to one
at April 30, 2000 for the trailing four (4) fiscal quarters, and at each fiscal
quarter end thereafter.
B. Financial Statements and Other Information. Maintain a system of
accounting satisfactory to Bank and in accordance with GAAP applied on a
consistent basis throughout the period involved, permit Bank's officers or
authorized representatives to visit and inspect Borrower's books of account and
other records at such reasonable times and as often as Bank may desire. Borrower
shall pay the reasonable fees and disbursements of any accountants or other
agents of Bank selected by Bank for the foregoing purposes one time each year
during the term of the Loans. Unless written notice of another location is given
to Bank, Borrower's books and records will be located at Borrower's chief
executive office set forth above. All financial statements called for below
shall be prepared in form and content acceptable to Bank and by independent
certified public accountants acceptable to Bank.
In addition, Borrower will:
(i) Furnish to Bank (a) a report of audit of Borrower (including any
management letter), prepared by a firm of certified public accountants
reasonably acceptable to Bank, within 120 days after the close of each such
fiscal year and (b) a copy of the Borrower's federal income tax return, for each
fiscal year of Borrower, within 30 days of the date the same is filed;
(ii) Furnish to Bank a copy of the Borrower's quarterly report on Form
10-Q, within 45 days after the close of each such fiscal quarter;
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(iii) Furnish to Bank monthly financial statements (including a balance
sheet and profit and loss statement) of Borrower, which shall be prepared by
Borrower, for each month of each fiscal year of Borrower, within 45 days after
the close of each such month.
(iv) Furnish to Bank a compliance certificate for (and executed by an
authorized representative of) Borrower concurrently with and dated as of the
date of delivery of each of the financial statements as required in paragraphs
(i) and (ii) above, containing (a) a certification that the financial statements
of even date are true and correct and that the Borrower is not in default under
the terms of this Agreement, and (b) computations and conclusions, in such
detail as Bank may request, with respect to compliance with this Agreement, and
the other Loan Documents, including computations of all quantitative covenants.
Such compliance certificates shall be substantially in the form of Exhibit C
attached hereto.
(v) Furnish to Bank promptly such additional information, reports and
statements respecting the business operations and financial condition of
Borrower, from time to time, as Bank may reasonably request.
C. Insurance. Except as otherwise provided herein, maintain insurance
with insurance companies reasonably acceptable to the Bank on such of its
properties, in such amounts and against such risks as is customarily maintained
by similar businesses operating in the same vicinity, specifically to include
fire and extended coverage insurance covering all assets, business interruption
insurance, and liability insurance, all to be with such companies and in such
amounts as are satisfactory to Bank. Satisfactory evidence of such insurance
will be supplied to Bank prior to funding under the Loans and 30 days prior to
each policy renewal. Bank acknowledges and agrees that Borrower is self-insured
for collision damage on all vehicles constituting equipment; that it requires
its lessees to maintain collision insurance on all vehicles constituting
inventory held for lease, which insurance names the Borrower as loss payee; and
that it is self insured for workers compensation insurance. Borrower agrees that
it will notify Bank immediately if separate insurance coverage is hereafter
purchased by Borrower covering such risks, such insurance to be subject to the
terms of this section.
D. Existence and Compliance. Maintain its existence, good standing
and qualification to do business, where required and comply with all laws,
regulations and governmental requirements including, without limitation,
environmental laws applicable to it or to any of its property, business
operations and transactions.
E. Adverse Conditions or Events. Promptly advise Bank in writing of
(i) any condition, event or act which comes to its attention that the Borrower
reasonably believes would or might have a Material Adverse Effect on Borrower's
financial condition or operations, the Collateral, or Bank's rights under the
Loan Documents, (ii) any litigation filed by or against Borrower seeking in
excess of $50,000 in damages, (iii) any event that has occurred that would
constitute an event of default under any Loan Documents and (iv) any uninsured
or partially uninsured loss through
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fire, theft, liability or property damage in which the uninsured damages are in
excess of an aggregate of $100,000.00.
F. Taxes and Other Obligations. Pay all of its taxes, assessments
and other obligations, including, but not limited to taxes, costs or other
expenses arising out of this transaction, as the same become due and payable,
except to the extent the same are being contested in good faith by appropriate
proceedings in a diligent manner.
G. Maintenance. Maintain all of its tangible property in good
condition and repair, except for those properties deemed to be obsolete by the
Borrower, and make all necessary replacements thereof, and preserve and maintain
all licenses, trademarks, privileges, permits, franchises, certificates and the
like necessary for the operation of its business.
H. Notification of Environmental Claims. Borrower shall immediately
advise Bank in writing of (i) any and all enforcement, cleanup, remedial,
removal, or other governmental or regulatory actions instituted, completed or
threatened pursuant to any applicable federal, state, or local laws, ordinances
or regulations relating to any Hazardous Materials affecting Borrower's business
operations; and (ii) all claims made or threatened by any third party against
Borrower relating to damages, contribution, cost recovery, compensation, loss or
injury resulting from any Hazardous Materials. Borrower shall immediately notify
Bank of any remedial action taken by Borrower with respect to Borrower's
business operations.
7. NEGATIVE COVENANTS. Until full payment and performance of all
obligations of Borrower under the Loan Documents, Borrower will not, without the
prior written consent of Bank (and without limiting any requirement of any other
Loan Documents):
A. Ownership and Management. Make or permit to be made any material
change in the ownership or executive management of the Borrower; provided,
however, that the Borrower shall not be prohibited by this covenant from
conducting any public offering of its capital stock, or from issuing its capital
stock pursuant to the terms of the Convertible Notes, the warrants issued in
connection with the Convertible Notes, or the warrants issued to certain
investors in September, 1999.
B. Transfer of Assets or Control. Sell, lease, sell and leaseback,
assign or otherwise dispose of or transfer any assets, except in the normal
course of its business, or enter into any merger or consolidation, or transfer
control or ownership of the Borrower, or form or acquire any Subsidiary, except
for a wholly-owned Subsidiary which has executed a guaranty of the Revolver, in
form satisfactory to the Bank. It is expressly provided, however, that Borrower
may transfer all of its interest in the assets related to the bottling facility
under construction at Hamptonville, North Carolina, to the Bottling Company,
which will be formed to own such assets jointly with Manchester Tank & Equipment
Company.
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C. Liens. Grant, suffer or permit any contractual or noncontractual
lien on or security interest in its assets, except in favor of Bank, or fail to
promptly pay when due all lawful claims, whether for labor, materials or
otherwise, except claims which the Borrower is diligently contesting in good
faith and has provided reserves that are adequate in the Bank's reasonable
judgment.
D. Extensions of Credit. Make any loan or advance to any individual,
partnership, corporation or other entity, except (i) intercompany advances to
Subsidiaries of the Borrower which have guaranteed all indebtedness to the Bank,
(ii) as previously disclosed to Bank in writing, and (iii) other loans, not in
excess of an aggregate principal amount of $250,000.
E. Borrowings. Create, incur, assume or become liable in any manner
for any indebtedness (for borrowed money, deferred payment for the purchase of
assets, lease payments, as surety or guarantor for the debt for another, or
otherwise), other than to Bank, except for normal trade debts incurred in the
ordinary course of Borrower's business, and except for existing indebtedness
disclosed to Bank in writing and acknowledged by Bank prior to the date of this
Agreement. Borrower shall also be permitted to incur indebtedness to
Subsidiaries, shareholders or related companies hereafter, as long as the
incurrence of such indebtedness is disclosed to Bank and all such indebtedness
is fully subordinated to Borrower's indebtedness to Bank, in form satisfactory
to Bank. Borrower shall also be permitted to incur up to $500,000, in the
aggregate, of purchase money indebtedness in connection with acquisitions by
Borrower, payable to the former owners of the acquired entities or assets.
F. Capital Leases. Enter into capital leases in excess of an
aggregate of Two Million Five Hundred Thousand Dollars ($2,500,000) in amount of
all capital leases at any time outstanding.
G. Payments on Convertible Notes. Make any payment or prepayment in
any amount on the Convertible Notes with funds obtained, in whole or in part,
from advances under the Revolver.
H. Dividends and Distributions. At any time Borrower is in default
under this Agreement, or would be in default following or as a result thereof,
make any distribution (other than dividends payable in capital stock of
Borrower) on any shares of any class of its capital stock, or apply any of its
property or assets to the purchase, redemption or other retirement of any shares
of any class of capital stock of Borrower, or in any way amend its capital
structure.
I. Character of Business. Change the general character of business as
conducted at the date hereof, or engage in any type of business not reasonably
related to its business as presently conducted.
8. DEFAULT. Borrower shall be in default under this Agreement and under
each of the other Loan Documents (an "Event of Default") if it shall default in
the
15
payment of any amounts due and owing under the Loans. Borrower shall also be in
default if it should fail to timely and properly observe, keep or perform any
term, covenant, agreement or condition in any Loan Document (other than a
payment default) or in any other loan agreement, promissory note, guaranty,
security agreement, deed of trust, assignment, pledge or other contract securing
or evidencing payment of any indebtedness of Borrower to Bank or any affiliate
or subsidiary of Bank of America Corporation, and such default shall continue
uncured for a period of thirty (30) days (such thirty-day cure period to apply
to any such default, notwithstanding the absence of any such cure period in or
the conflicting provisions of any other Loan document). Borrower shall also be
in default hereunder if it shall default in payment of any amounts due and owing
under the Convertible Notes.
9. REMEDIES UPON DEFAULT. If an Event of Default shall occur, Bank shall
have all rights, powers and remedies available under each of the Loan Documents
as well as all rights and remedies available at law or in equity.
10. NOTICES. All notices, requests or demands which any party is required
or may desire to give to any other party under any provision of this Agreement
must be in writing delivered to the other party at the following address:
Borrower: Blue Rhino Corporation
104 Cambridge Plaza Drive
Winston-Salem, NC 27104
ATTN: Mark Castaneda
Chief Financial Officer
Bank: Bank of America, N.A.
380 Knollwood Street
Winston-Salem, NC 27103
ATTN: J. Thomas Johnson, Jr.
Senior Vice President
or to such other address as any party may designate by written notice to the
other party. Each such notice, request and demand shall be deemed given or made
as follows:
A. If sent by hand delivery, upon delivery;
B. If sent by mail, upon the earlier of the date of receipt or five
(5) days after deposit in the U.S. Mail, first class postage prepaid.
11. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall pay to Bank
immediately upon demand the full amount of all costs and expenses, including
reasonable attorneys' fees, incurred by Bank in connection with Bank's
collection of, or attempts to collect, any Obligations due hereunder or under
the Notes.
16
12. MISCELLANEOUS. Borrower and Bank further covenant and agree as
follows, without limiting any requirement of any other Loan Document:
A. Cumulative Rights and No Waiver. Each and every right granted to
Bank under any Loan Document, or allowed it by law or equity shall be cumulative
of each other and may be exercised in addition to any and all other rights of
Bank, and no delay in exercising any right shall operate as a waiver thereof,
nor shall any single or partial exercise by Bank of any right preclude any other
or future exercise thereof or the exercise of any other right. Borrower
expressly waives any presentment, demand, protest or other notice of any kind,
including but not limited to notice of intent to accelerate and notice of
acceleration. No notice to or demand on Borrower in any case shall, of itself,
entitle Borrower to any other or future notice or demand in similar or other
circumstances.
B. Applicable Law. This Loan Agreement and the rights and obligations
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of North Carolina (excluding, however, any principles of
conflicts of laws) and applicable federal law.
C. Amendment. No modification, consent, amendment or waiver of any
provision of this Loan Agreement, nor consent to any departure by either party
therefrom, shall be effective unless the same shall be in writing and signed by
each party, and then shall be effective only in the specified instance and for
the purpose for which given. This Loan Agreement is binding upon Borrower, its
successors and assigns, and inures to the benefit of Bank, its successors and
assigns; however, no assignment or other transfer of Borrower's rights or
obligations hereunder shall be made or be effective without Bank's prior written
consent, nor shall it relieve Borrower of any obligations hereunder. There is no
third party beneficiary of this Loan Agreement.
D. Documents. All documents, certificates and other items required
under this Loan Agreement to be executed and/or delivered to Bank shall be in
form and content satisfactory to Bank and its counsel.
E. Partial Invalidity. The unenforceability or invalidity of any
provision of this Loan Agreement shall not affect the enforceability or validity
of any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.
F. Indemnification. Borrower shall indemnify, defend and hold Bank
and its successors and assigns harmless from and against any and all claims,
demands, suits, losses, damages, assessments, fines, penalties, costs or other
expenses (including reasonable attorneys' fees and court costs) ("Indemnified
Damages") arising from or in any way related to any of the transactions
contemplated hereby, except Indemnified Damages occurring as a result of willful
or negligent conduct of the Bank, including but not limited to actual or
threatened damage to the environment, agency costs
17
of investigation, personal injury or death, or property damage, due to a release
or alleged release of Hazardous Materials, arising from Borrower's business
operations, any other property owned by Borrower or in the surface or ground
water arising from Borrower's business operations, or gaseous emissions arising
from Borrower's business operations or any other condition existing or arising
from Borrower's business operations resulting from the use or existence of
Hazardous Materials, whether such claim proves to be true or false. Borrower
further agrees that its indemnity obligations shall include, but are not limited
to, liability for damages resulting from the personal injury or death of an
employee of the Borrower, regardless of whether the Borrower has paid the
employee under the worker's compensation laws of any state or other similar
federal or state legislation for the protection of employees. The term "property
damage" as used in this paragraph includes, but is not limited to, damage to any
real or personal property of the Borrower, the Bank, and of any third parties.
The Borrower's obligations under this paragraph shall survive the repayment of
the Loans and foreclosure of the Collateral.
G. Survivability. All covenants, agreements, representations and
warranties made herein or in the other Loan Documents shall survive the making
of the Loans and shall continue in full force and effect so long as the Loans
are outstanding or the obligation of the Bank to make any advances under the
Loans shall not have expired.
H. Updated Appraisals and Maintenance of Collateral Value. Bank may
at its option, at Borrower's expense, obtain an appraisal of the Collateral
securing payment of the Loans. The costs of each such appraisal shall be payable
by Borrower to Bank on demand. If such appraisal shows the market value of the
Collateral has declined, Borrower agrees that, upon demand by Bank, it will
immediately either pledge additional collateral in form and substance
satisfactory to Bank or make such payments as shall be necessary to reduce the
principal balance outstanding under the Loan.
13. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO, INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW). THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION
OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE, INC., OR ANY SUCCESSOR THEREOF
("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS
AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO
COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
18
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF
THE BORROWER'S DOMICILE AT TIME OF THE EXECUTION OF THIS AGREEMENT AND
ADMINISTERED BY J.A.M.S., WHICH WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS
UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE
COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR
SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF
SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II) BE A
WAIVER BY THE BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK HERETO
(A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B)
TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO)
INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE BANK
MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS AGREEMENT. NEITHER THE EXERCISE
OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR
FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF
THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
14. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
15. RATIFICATION OF ORIGINAL AGREEMENT. Borrower hereby acknowledges that
it is indebted to the Bank pursuant to the BR Loan Agreement in accordance with
the terms thereof, as amended prior to the date hereof, and that there exists no
defense, offset to, or claim in diminution or avoidance of, any of its
liabilities and obligations pursuant to such BR Loan Agreement, as so amended.
Borrower further ratifies and affirms the BR Loan Agreement, as amended
previously and as amended and
19
restated by this Amended and Restated Loan Agreement; agrees that there is no
change or modification thereto, except as expressly provided herein; and agrees
that the BR Loan Agreement, as amended previously and as amended and restated
hereby, shall be and constitute the Loan Agreement, with the same effect as if
this Agreement had been made on the date of the BR Loan Agreement, and not a
novation thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
BORROWER:
---------
BLUE RHINO CORPORATION
ATTEST: /s/ Billy D. Prim
By:____________________________
/s/ Mark Castaneda CEO
_________________________ Title:_________________________
Secretary
[Corporate Seal]
BANK:
-----
BANK OF AMERICA, N.A.
/s/ J. Thomas Johnson, Jr
By:___________________________
Senior Vice President
Title:________________________
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EXHIBIT A
BORROWING BASE AGREEMENT
------------------------
1. Borrowing Base. The aggregate principal amount of all amounts from time
to time advanced pursuant to the terms of that promissory note dated December
__, 1999 in the principal amount of $25,000,000 (the "Note") shall not exceed
the Maximum Amount.
"Maximum Amount" shall mean the lesser of $25,000,000 or the Borrowing
Base. The "Borrowing Base" at any time, shall be equal to 80% of Eligible
Accounts Receivable, 50% of Eligible Inventory, and 50% of Equipment, as such
terms are defined herein or in the Amended and Restated Loan Agreement between
Borrower and Bank dated December __, 1999.
"Eligible Accounts Receivable" shall mean all accounts receivable of
Borrower which have been created in the ordinary course of Borrower's business
and for which Borrower's right to receive payment is absolute and not contingent
upon the fulfillment of any condition whatsoever, and shall not include:
(i) any invoice which is more than ninety (90) days past due;
(ii) any account for which there exists a right of set off, defense or
discount (except regular discounts allowed in the ordinary course of business to
promote prompt payment) and for which no defense or counterclaim has been
asserted;
(iii) any account which represents an obligation of any local, state
or federal governmental agency or entity;
(iv) any account which arises out of a contract or order which, by its
terms, forbids or makes void or unenforceable any assignment by Borrower to Bank
of the account receivable arising with respect thereto;
(v) any account arising from a "sale on approval," "sale or return,"
"consignment," or subject to any other repurchase or return agreement;
(vi) any account which represents an obligation of a customer which is
not a resident of the United States or its territories unless such account is
supported by a letter of credit in form and substance acceptable to Bank;
(vii) any account which arises from the sale or lease to or
performance of services for, or represents an obligation of, an employee,
affiliate, partner, parent or Subsidiary of Borrower;
(viii) any account which represents an obligation of a customer of
Borrower when 80% or more of Borrower's accounts from such customer are not
eligible pursuant to the foregoing formula; and
21
(ix) any unapplied credits over 90 days old.
"Accounts Receivable" shall mean all of the Borrower's accounts,
instruments, contract rights, chattel paper, document, and general intangibles
arising from the sale of goods and/or the rendition of services by the Borrower
in the ordinary course of business, and the proceeds thereof and all security
and guaranties therefor, whether now existing or hereafter created, and all
returned, reclaimed or repossessed goods, and all books and records pertaining
to the foregoing.
"Eligible Inventory" shall mean all non-obsolete cylinder inventory of
Borrower or USA Leasing, L.L.C., a guarantor of the loans to Borrower, which is
under lease to third party lessees.
2. Advances. The amounts of advances under the Revolver Note shall be
determined consistent with the value of the Eligible Accounts Receivable and the
Eligible Inventory, taking into account all fluctuations of the value thereof.
The Bank shall be under no obligation to make any advance to Borrower in excess
of the limitations stated above.
3. Reporting. In addition to any reporting requirements required under the
Loan Agreement to which this Borrowing Base Agreement is attached, the Borrower
will submit the following in form and substance satisfactory to Bank:
(i) Accounts Receivable Aging. Not later than thirty (30) days after
and as the end of each month, a listing of accounts receivable aged from date of
invoice.
(ii) Borrowing Base Certificate. Not later than thirty (30) days after
the end of each month, Borrower will submit a Borrowing Base Certificate in the
form attached hereto as Exhibit A- 1.
4. [x] Lock Box Arrangement. Bank and Borrower shall, upon request of Bank,
establish and maintain one or more special lock box or blocked accounts for the
collection of the Accounts Receivables. Each such special account shall be with
a bank satisfactory to the Bank (which may be an affiliate of the Bank) and
shall be subject to the Bank's standard form agreement. Any checks or other
remittances against Accounts Receivables which are received by the Borrower
shall be held in trust for the Bank and turned over by the Borrower to the Bank
or to a person designated by the Bank in the identical form received (except for
any necessary endorsement) as speedily as possible.
5. Mandatory Payment. In the event the aggregate principal outstanding
balance of advances under the Revolver Note exceeds the Maximum Amount, Borrower
shall immediately and without notice or demand of any kind, make such payments
as shall be necessary to reduce the principal balance of the Revolver Note below
the Maximum Amount.
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BLUE RHINO CORPORATION BANK OF AMERICA, N.A.
/s/ Billy D. Prim
By:__________________(Seal) By: /s/ J. Thomas Johnson, Jr.
Name: Billy D. Prim _________________________ (Seal)
Title: Manager Name: J. Thomas Johnson Jr.
Title: Senior Vice President
23