Exhibit 10.2
AMENDMENT TO SECURITY AGREEMENT
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THIS AMENDMENT TO SECURITY AGREEMENT (this "Amendment") dated as of
December 9, 1999, by and between BANK OF AMERICA, N.A., a national banking
association ("Bank") and BLUE RHINO CORPORATION ("Borrower"):
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, LLC, 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, the indebtedness of the Borrower pursuant to the BR Loan Agreement
was secured by a security interest in all of the Borrower's accounts receivable,
inventory and equipment, pursuant to a Security Agreement dated December 31,
1998 (the "BR Security Agreement"), and the indebtedness of Lessor pursuant to
the Lessor Loan Agreement was secured by a security interest in all of the
Lessor's accounts receivable, chattel paper (including leases), inventory and
equipment, pursuant to a Security Agreement dated December 31, 1998; 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, pursuant to
an Amended and Restated Loan Agreement of even date herewith (the "Restated Loan
Agreement"), so that Borrower will become the borrower under a revolving line of
credit in the principal amount of $25,000,000 (the "New Revolver"), payment of
which New Revolver the Lessor, among others, will guarantee; and
WHEREAS, the parties hereto wish to amend the BR Security Agreement, so
that it shall secure all of the Borrower's indebtedness pursuant to the Restated
Loan Agreement and the Revolver;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements contained herein, and intending to be legally bound hereby, Bank and
Borrower agree as follows:
1. Amendment. The BR Security Agreement is hereby amended to include in
the "Obligations" secured thereby all of the Borrower's indebtedness to the Bank
pursuant to the Restated Loan Agreement and the New Revolver, as the same now
exists and as it may be amended, extended, or modified (including any amendment
or modification to increase the same) hereafter.
2. Ratification and Waiver. The Borrower expressly ratifies and affirms
all of its liabilities and obligations to the Bank under and pursuant to the BR
Security Agreement, and further stipulates and agrees that there exists no
claim, defense, offset to, or matter in avoidance of any of its liability on
account thereof, and does further unconditionally waive, release and discharge,
for itself and its successors and assigns, any and all claims, defenses, offsets
or matters in avoidance of any of its said liability to the Bank on account
thereof. No waiver or release of, or consent to any action or omission contrary
to the terms of, this Amendment and such BR Security Agreement, is intended or
shall be inferred hereby, other than as expressly set forth herein.
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3. Representations and Warranties. The Borrower represents and warrants to
the Bank as follows:
(a) Power and Authority; Enforceability. The Borrower has the power
and authority to execute and deliver this Amendment and to perform the
terms and conditions of the BR Security Agreement, as amended and modified
by this Amendment. The execution and delivery of this Amendment by the
Borrower and the performance of the BR Security Agreement, as amended and
modified by this Amendment, do not and will not violate any law, rule or
regulation, or constitute a breach of the articles of incorporation, bylaws
or corporate resolutions of Borrower or any agreement to which the Borrower
is a party or by which its assets are bound. The BR Security Agreement, as
amended and modified by this Amendment, constitutes the legal, valid and
binding obligation of the Borrower, enforceable in accordance with its
respective terms, subject to bankruptcy, insolvency, reorganization, and
similar laws and other law generally affecting the enforceability of
creditors' rights and to general principles of equity.
(b) No Default. Upon the execution and delivery of this Amendment by
the Borrower, the Borrower will not be in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in the BR Security Agreement, as amended and modified
by this Amendment, or any other agreement or instrument relating to the
Restated Loan Agreement to which it is a party.
(c) Representations. The representations and the information furnished
by the Borrower to the Bank with regard to this Amendment are and shall
continue to be true and not misleading in all material respects. In
addition, the representations and warranties of the Borrower to the Bank
contained herein, in the BR Security Agreement, in the Restated Loan
Agreement, and in any other document or instrument executed or delivered by
the Borrower in connection therewith, are and shall continue to be true and
not misleading in all material respects, except as otherwise disclosed in
writing to the Bank and approved by the Bank prior to the date hereof.
4. Covenants. The Borrower covenants and agrees that, unless the Bank
shall otherwise consent in writing, the Borrower shall:
(a) Compliance with Covenants. Continue to comply with all of the
terms, covenants and agreements contained in the BR Security Agreement, as
amended and modified by this Amendment.
(b) Further Assurances. Execute and deliver such further instruments,
and take such further action as the Bank may reasonably request, in each
case to further effect the purposes of the BR Security Agreement, as
modified by this Amendment.
5. No Other Amendment. Except as expressly amended hereby, the BR
Security Agreement shall be and remain in full force and effect in accordance
with its terms.
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6. Miscellaneous.
(a) All references to the "Security Agreement" or the "Agreement" in the BR
Security Agreement shall hereafter mean and refer to the BR Security Agreement
as amended hereby.
(b) All capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed to such terms in the BR Security Agreement.
7. Counterparts. This Amendment may be executed in separate counterparts,
and said counterparts taken together shall be deemed to constitute one and the
same instrument. An executed copy of this Amendment delivered by telecopier
shall have the same effect as an originally executed copy of this Amendment.
8. NO ORAL AGREEMENT. THIS WRITTEN AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal by their duly authorized representatives as of the date
first above written.
BORROWER:
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BLUE RHINO CORPORATION
ATTEST:
By: /s/ Billy D. Prim
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/s/ Mark Castaneda Title: Chairman and CEO and President
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Secretary
[Corporate Seal]
BANK:
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BANK OF AMERICA, N.A.
By: /s/ J. Thomas Johnson, Jr
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Title: Senior Vice President
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