EXHIBIT 10.4
PATENT SECURITY AGREEMENT
THIS PATENT SECURITY AGREEMENT (as amended, restated, supplemented or
otherwise modified from time to time, this "Agreement") is entered into as of
November 20, 2002 by BLUE RHINO CORPORATION, a Delaware corporation, CPD
ASSOCIATES, INC., a North Carolina corporation, and UNIFLAME CORPORATION, a
Delaware corporation (collectively, the "Grantors"), in favor of BANK OF
AMERICA, N.A., as Administrative Agent (the "Administrative Agent") under the
Credit Agreement (as defined below)
The Grantors own certain patent and patent applications, including
those patents and patent applications listed on Schedule 1 annexed hereto, and
are parties to the patent licenses listed on Schedule 2 annexed hereto; and
Pursuant to the terms of the Collateral Agreement dated of even date
herewith (as amended, restated, supplemented or otherwise modified from time to
time, the "Collateral Agreement"), between the Grantors and the Administrative
Agent, the Grantors have granted to the Administrative Agent a security interest
in certain assets of the Grantors, including all right, title and interest of
each of the Grantors in, to and under all Patent Collateral (as hereinafter
defined) 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 owing by Blue Rhino Corporation, as Borrower (the
"Borrower") under the Credit Agreement, dated of even date herewith (as amended,
restated, supplemented or otherwise modified, the "Credit Agreement"), by and
among the Borrower, the Lenders party thereto and the Administrative Agent, and
the other Loan Documents described in the Credit Agreement. All capitalized
terms defined in the Credit Agreement or the Collateral Agreement and not
otherwise defined herein have the respective meanings provided for in the Credit
Agreement or the Collateral Agreement, as applicable.
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:
1. GRANT OF SECURITY INTEREST. Each Grantor does hereby grant to the
Administrative Agent a continuing security interest in all of such Grantor's
right, title and interest in, to and under all of the following (all of the
following items or types of property being herein collectively referred to as
the "Patent Collateral"), whether now existing or hereafter created or acquired,
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) each Patent, including, without limitation, each Patent
referred to in Schedule 1, annexed hereto, together with any reissues,
continuations, divisions or extensions thereof;
(b) all Patent Licenses and other agreements providing the
Grantor with the right to use, or pursuant to which the Grantor provides the
right to use, any of the items described in Section 1(a), including each Patent
License referred to in Schedule 2; and
(c) all, products and proceeds of, and the rights associated
with, the foregoing, including, without limitation, any claim by any such
Grantor against third parties for past, present or future (i) infringement of
any Patent, including, without limitation, the Patents referred to in Schedule
1, the Patents issued with respect to the Patent applications or provisional
Patent applications referred to in Schedule 1 and, to the extent applicable, the
patents licensed under any Patent License, or (ii) breach or enforcement of any
Patent License.
2. OTHER SECURITY INTERESTS. This security interest is granted in
conjunction with the security interests granted to the Administrative Agent
pursuant to the Collateral Agreement. Each Grantor hereby acknowledges and
affirms that the rights and remedies of the Administrative Agent with respect to
the security interest granted herein are without prejudice to, and are in
addition to, those set forth in the Collateral Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein. In the event that any provisions of this Agreement are deemed to
conflict with the Collateral Agreement, the provisions of the Collateral
Agreement shall govern.
3. RESTRICTIONS ON FUTURE AGREEMENTS. Each Grantor agrees that until
all Obligations shall have been satisfied in full and the Credit Agreement shall
have been terminated, such Grantor will not, without the Administrative Agent's
prior written consent, enter into any agreement including, without limitation,
any license agreement, which is inconsistent with such Grantor's obligations
under this Agreement if such action would reasonably be expected to materially
adversely affect the fair market value of the Patent Collateral or the benefits
of this Agreement to the Administrative Agent, and such Grantor further agrees
that it will not take any action, or permit any action to be taken by others
subject to its control, including licensees, or fail to take any action, which
would materially adversely affect the validity or enforcement of the rights
transferred to the Administrative Agent under this Agreement.
4. NEW PATENTS. Each Grantor represents and warrants to the
Administrative Agent that the Patents listed on Schedule 1 and the Patent
Licenses listed on Schedule 2 constitute all of the Patents now owned by or
licensed to such Grantor for which registrations have been issued or applied for
in the United States Patent and Trademark Office. If, before the Obligations
have been satisfied in full and the Credit Agreement terminated, the Grantor
shall obtain rights to any new patents, patent applications or provisional
Patent applications granted or filed in the United States or in any foreign
country, the provisions of Section 1 above shall automatically apply thereto and
the Grantor shall give to the Administrative Agent prompt written notice
thereof. The Grantor hereby authorizes the Administrative Agent to modify this
Agreement upon such written notice by amending Schedule 1 and Schedule 2 to
include any future patents, patent applications, provisional Patent applications
and license agreements which are Patents, as applicable, under Section 1 above
or under this Section 4.
5. LENDERS NOT LIABLE. Neither the Administrative Agent nor any Lender
by virtue of this Agreement assumes any obligations whatsoever in respect of the
Patent Collateral
including, without limitations, any obligation to renew registrations of or
defend the validity or enforceability of the Patent Collateral.
6. 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. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of the Grantors and shall inure to the benefit of the
Grantors, 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.
[Signature Pages Follow]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed by its duly authorized officer thereunto, all as of the date first set
forth above.
BLUE RHINO CORPORATION,
as Grantor
By: /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: Executive Vice President and Chief
Financial Officer
UNIFLAME CORPORATION, as Grantor
By: /s/ Xxxx Xxxxxxxx
------------------------------------------------
Name: Xxxx Xxxxxxxx
Title: Vice President
[Signature Pages Continue]
ACKNOWLEDGMENT
STATE OF NORTH CAROLINA
COUNTY OF FORSYTH
I, Xxxxx X. Xxxxxx a Notary Public for said County and State, do hereby
certify that Xxxx Xxxxxxxxx personally appeared before me this day and stated
that he is Exec. VP & CFO of BLUE RHINO CORPORATION and acknowledged the due
execution of the foregoing instrument.
Witness my hand and official seal, this 13th day of November, 2002.
/s/ Xxxxx X. Xxxxxx
----------------------------------
Notary Public
My commission expires:
9/26/04
---------------------------
ACKNOWLEDGMENT
STATE OF NORTH CAROLINA
COUNTY OF FORSYTH
I, Xxxxx X. Xxxxxx a Notary Public for said County and State, do hereby
certify that Xxxx Xxxxxxxx personally appeared before me this day and stated
that he is Vice President of UNIFLAME CORPORATION and acknowledged the due
execution of the foregoing instrument.
Witness my hand and official seal, this 13th day of November, 2002.
/s/ Xxxxx X. Xxxxxx
----------------------------------
Notary Public
My commission expires:
9/26/04
---------------------------
Agreed and Accepted as of November 20, 2002.
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: Vice President and Senior Agency Officer
[Acknowledgment Follows]
Schedule 2
to Patent
Security Agreement
