EXHIBIT 10.1(a)
NATIONSBANK, N.A.
LOAN AGREEMENT
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This Loan Agreement (the "Agreement") dated as of December 18, 1997, by
and between NATIONSBANK, N.A., a national banking association ("Bank") and the
Borrower described below:
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 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. Affiliate. As to any Person, each of the Persons that directly
or indirectly, through one or more intermediaries, owns or controls, or is
controlled by or under common control with, such Person or any individual
related to such Person. For the purpose of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of management and policies, whether through the ownership of voting
securities, by contract or otherwise.
B. Borrower. Blue Rhino Corporation, a Delaware corporation.
C. Borrower's Address: 000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
D. Collateral. The property and interests in property securing
payment and performance of the Loans, as set forth in Section 3 hereof.
E. Debt Service Coverage. The quotient of net income after taxes
plus depreciation and amortization and any change in deferred taxes, divided by
the sum of the prior year's maturities of long-term debt and capital leases
actually paid, plus cash dividends actually paid.
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.
I. Guarantors. Jointly and severally, Xxxxx X. Xxxx, a citizen and
resident of Winston-Salem, North Carolina, and American Oil and Gas Company, a
North Carolina corporation.
J. Hazardous Materials. All materials defined as hazardous wastes or
substances under any local, state or federal environmental laws, rules or
regulations, and petroleum, petroleum products, oil and asbestos.
K. Inventory. Means all non-obsolete inventory of Borrower of every
kind or character, wherever located, for which Borrower:
(i) has full title, free and clear of any security interest,
liens and claims whatsoever; and
(ii) has the right to convey such inventory as security for the
Obligations; and
(iii) such inventory is in first class order, condition and
repair.
L. LIBOR. The London Interbank Offered Rate for thirty-day deposits,
adjusted for applicable reserves, as determined by the Bank, from time to time.
M. Loans. Collectively, the loans described in Section 2 hereof and
any other existing or subsequent loan by Bank to the Borrower that is subject to
this Agreemeent.
N. Loan Documents. Loan Documents means this Loan Agreement and any
and all promissory notes executed by Borrower in favor of Bank and all other
documents, instruments guarantees, certificates and agreements executed and/or
delivered by Borrower, any guarantor or third party in connection with any Loan.
O. Material Adverse Effect. Any material adverse effect on (i) the
business, assets, operations or financial or other condition of Borrower and its
subsidiaries or Affiliates, (ii) the Borrower's ability to pay the Obligations
in accordance with the terms thereof, or (iii) the Collateral or Bank's security
interest in the Collateral or the priority of such security interest. Without
limiting the foregoing, any adverse effect on the business, assets, operations
or financial or other condition of Borrower and its subsidiaries (if any)
involving, individually or in the aggregate, a liability of the Borrower or any
of its subsidiaries in excess of applicable insurance coverage by more
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than $100,000 shall be deemed to be a "Material Adverse Effect" within the
meaning of the applicable provisions of this Agreement.
P. Notes. Collectively, the Revolver Note, the Working Capital Note,
the Capex Note and the Acquisition Note, as such terms are defined herein.
Q. 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, whether direct
or indirect (including those acquired by assignment), absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter arising.
The term includes, without limitation, all interest, charges, reasonable
expenses, reasonable fees, reasonable attorneys' fees and any other sums
chargeable to the Borrower by the Bank under this Agreement or any of the other
Loan Documents
R. Person. A corporation, an association, a joint venture, a limited
liability company, a partnership, an organization, a business, an individual, a
trust or a government or political subdivision thereof or any government agency
or any other legal entity.
S. Prime Rate. That rate of interest determined by the Bank from
time to time to be its "prime rate" for commercial loans, whether or not such
rate shall be publicly announced.
T. Platinum. Platinum Propane Holding, LLC, a Delaware limited
liability company that is affiliated with the Borrower through common ownership.
U. 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) Affiliates, and (iv) other assets constituting
intangible assets, including, without limitation, any patents, trademarks,
tradenames, copyrights or similar intellectual property.
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
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information required under this Agreement shall be prepared, in accordance with
GAAP, as in effect on the date hereof.
2. LOANS. Subject to the terms of this Agreement, Bank hereby agrees to
make 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 Three Million Dollars ($3,000,000), for the purpose
of refinancing the Borrower's existing revolving line of credit at LaSalle Bank,
and to finance its short-term working capital needs. The Revolver will be
available during the period commencing on the date hereof and continuing until
November 30, 1998 (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 "Revolver Note") in the principal amount of $3,000,000,
which Revolver Note shall bear interest and be payable in accordance with the
terms set forth hereinbelow. It is further provided that the commitment of the
Bank to continue to make the Revolver available to the Borrower beyond the
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. Interest on the principal amount outstanding
under the Revolver from time to time shall accrue at the rate of the Prime Rate,
plus one-half percent (1/2%) per annum, which accrued interest shall be payable
monthly in arrears. The principal of the Revolver 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
one and one-half percent (1 1/2%) of the principal amount of the Revolver Loan
at the closing thereof. 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.
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(v) Administration of Accounts. (a) Borrower agrees to submit to Bank,
within thirty (30) days of the end of each quarterly period during the term of
the Revolver, a summary aged trial balance of all accounts existing as of the
last day of such quarterly period, in form satisfactory to the Bank. Borrower
agrees to keep accurate and complete records of its accounts, and of all
payments and collections thereof.
(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) 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.
(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.
B. Working Capital Line of Credit. (i) Subject to the terms hereof, Bank
agrees to extend a revolving line of credit (the "Working Capital Revolver") to
Borrower, in the original principal amount of One Million Dollars ($1,000,000),
for the purpose of financing the Borrower's general working capital needs. The
Working Capital Revolver will be available during the period commencing on the
date hereof and continuing until November 30, 1998 (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 and the Borrowing Base. As a condition of any advance under the
Working Capital Revolver, Borrower shall inform Bank as to the purpose and
intended use of such advance. Borrower shall execute and deliver to Bank a
promissory note (the "Working Capital Note") in the principal amount of
$1,000,000, which Working Capital Note shall bear interest and be payable in
accordance with the terms set forth herein below.
(ii) Interest and Principal. Interest on the principal amount outstanding
under the Working Capital Revolver from time to time shall accrue at the rate of
the Prime Rate, plus one-half percent (1/2%) per annum, which accrued interest
shall be payable monthly in arrears. The principal of the Working Capital Note
shall be repaid in full, if not sooner paid, on the Maturity Date, together with
all accrued but unpaid interest thereon.
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(iii) Fees. Borrower shall pay to Bank a commitment fee in the amount of
one and one-half percent (1 1/2%) of the principal amount of the Working Capital
Revolver at the closing thereof. 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 Working Capital Revolver.
(iv) Collateral Security. Repayment in full of the Working Capital
Revolver shall be secured by all Accounts Receivable, Inventory and Equipment of
Borrower, now owned or hereafter acquired, including all proceeds thereof.
C. Capital Expenditures Line of Credit. (i) Subject to the terms hereof,
the Bank may, in its sole discretion, extend an additional uncommitted revolving
line of credit (the "Capex Revolver") to Borrower, in the original principal
amount of One Million Dollars ($1,000,000), for the purpose of financing the
Borrower's capital expenditures. Advances and readvances under the Capex
Revolver will be made available to the Borrower in the Bank's sole discretion,
subject to the Bank's satisfaction with the Borrower's financial condition and
with the purpose and intended use of the loan proceeds by the Borrower. Borrower
may repay advances under the Capex Revolver at any time prior to the Maturity
Date. Any advances under the Capex Revolver that are not sooner paid shall be
payable in full on November 30, 1998 (which date, as extended in accordance with
the terms hereof, shall be the "Maturity Date"). Borrower shall execute and
deliver to Bank a promissory note (the "Capex Note") in the principal amount of
$1,000,000, which Capex Note shall bear interest and be payable in accordance
with the terms set forth herein below.
(ii) Interest and Principal. Interest on the principal amount outstanding
under the Capex Revolver from time to time shall accrue at the rate of the Prime
Rate, plus one-half percent (1/2%) per annum, which accrued interest shall be
payable monthly in arrears. The principal of the Capex 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
one and one-half percent (1 1/2%) of the principal amount of each advance under
the Capex Revolver at the time such advance is made.
(iv) Collateral Security. Repayment in full of the Capex Revolver shall
be secured by all Accounts Receivable, Inventory and Equipment of Borrower, now
owned or hereafter acquired, including all proceeds thereof.
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D. Acquisition Loan. (i) Subject to the terms hereof, Bank agrees to
extend a short-term loan (the "Acquisition Loan") to Borrower, in the original
principal amount of Four Million Dollars ($4,000,000), for the purpose of
providing a portion of the funds to finance the acquisition by Borrower and
Platinum of certain assets of USA Cylinder Exchange, Inc. The proceeds of the
Acquisition Loan will be available to Borrower at the closing of such
acquisition. To evidence the Acquisition Loan, Borrower shall execute and
deliver to Bank a promissory note (the "Acquisition Note") in the principal
amount of $4,000,000, which Acquisition Note shall bear interest and be payable
in accordance with the terms set forth herein below.
(ii) Interest and Principal. Interest on the principal amount outstanding
under the Acquisition Loan from time to time shall accrue at the rate of the
Prime Rate, plus one-half percent (1/2%) per annum, which accrued interest shall
be payable monthly in arrears. The principal of the Acquisition Note shall be
repaid in consecutive equal quarterly installments of $250,000 each, together
with accrued interest thereon, commencing May 1, 1998 and continuing on the
first day of each consecutive quarterly period thereafter, with a final payment
of all remaining principal and accrued but unpaid interest on November 30, 1998.
(iii) Fees. Borrower shall pay to Bank a commitment fee in the amount of
one and one-half percent (1 1/2%) of the principal amount of the Acquisition
Loan at the closing thereof.
(iv) Collateral Security. Repayment in full of the Acquisition Loan shall
be secured by all Accounts Receivable, Inventory and Equipment of Borrower, now
owned or hereafter acquired, including all proceeds thereof.
E. Other Interest Rate Provisions Applicable to the Loans.
(a) Following the completion of an initial public offering of capital
stock by the Borrower, Bank agrees that it will, upon the Borrower's request,
convert the interest rate applicable to the Loans to a LIBOR-based rate. Such
rate will vary, according to the Borrower's compliance with certain financial
ratios, as set forth below, as computed by the Borrower's certified public
accountants, in a manner reasonably acceptable to the Bank. The financial ratios
shall be calculated annually and, if satisfied, shall apply to the Loans during
the next succeeding year. At any time that the Borrower does not meet the
requirements of such financial ratios, however, the interest rate will be or
revert to the rate of the Bank's Prime Rate plus one-half percent. It is further
provided that the Borrower must be in compliance with all of the terms and
provisions of this Agreement to receive the following rates:
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Debt
If Funded Debt/ to Tangible Then the Rate
EBITDA is: Net Worth is: will be:
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(a) less than or equal 2.0 or less, LIBOR + 175 basis
to 2.5; and points
(b) less than or equal 1.5 or less, LIBOR + 150 basis
to 2.0; and points
(c) less than or equal 1.0 or less, LIBOR + 125 basis
to 1.5; and points
(b) Borrower shall also have the option to fix the interest rate on all or
any portion of the Loans, at any time, through the use of a Hedge Agreement
purchased from the Bank at the market rate for such products. For purposes
hereof, a "Hedge Agreement" means any agreement between Borrower and Bank, or
any affiliate of Bank, now existing or hereafter entered into, which provides
for an interest rate or commodity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross-currency swap, currency option, or
any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging Borrower's exposure to fluctuations in interest
rates, currency valuations or commodity prices. Notwithstanding any other terms
of this Agreement, any loan subject to a Hedging Agreement shall be prepayable
only in accordance with, and subject to any fees imposed under, the terms of
such Hedging Agreement.
3. COLLATERAL SECURITY; SUBORDINATIONS. (i) Payment and performance of
the Notes shall be secured by the collateral security for such Notes 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 Notes.
All Obligations of the Borrower to the Bank pursuant to the Revolver Note, the
Working Capital Note, the Capex Note and the Acquisition Note shall be cross-
collateralized, such that all Collateral for any such Note shall be deemed to
secure all such Notes.
Borrower further agrees to pledge and assign to Bank all of its right,
title and interest in and to all indebtedness due from shareholders, Affiliates
and related companies including, without limitation, that certain promissory
note made by Platinum payable to Borrower, dated June 30, 1997, in the original
principal amount of $1,733,648, as additional collateral security for the Loans.
(ii) Borrower further agrees that all indebtedness due to shareholders,
Affiliates and related companies, now existing or hereafter incurred, including,
without limitation, Platinum and Platinum Venture Partners, shall be
subordinated, both as to right and priority of payment, to the prior payment in
full of all
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indebtedness of Borrower to the Bank. Borrower shall cause each Person to whom
such indebtedness is owed to acknowledge such subordination, in form
satisfactory to Bank. It is expressly provided, however, that notwithstanding
the aforesaid subordination, Borrower may repay such subordinated indebtedness
following any public offering by the Borrower if, at the same time, the
Borrower's indebtedness to the Bank is also repaid in full.
(iii) 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.
4. GUARANTORS. Payment in full of the Loans, together with all accrued
interest, fees and other charges applicable thereto, shall be guaranteed,
jointly and severally, by Xxxxx X. Xxxx and American Oil and Gas Company,
pursuant to guaranty agreements in form satisfactory to the Bank. It is
expressly provided, however, that each of the guarantees of such Guarantors
shall be limited to a principal amount of $6,000,000, together with interest
thereon and fees applicable thereto. The Guarantors further agree to maintain,
at all times that the Loans remain unpaid, combined liquidity in the amount of
not less than $2,500,000. For purposes hereof, "liquidity" shall mean cash, cash
equivalents and readily-marketable securities owned by such Guarantors that are
not pledged, subject to any lien, restricted or encumbered in any fashion.
5. CONDITIONS PRECEDENT. The Bank's agreement to extend the Loans to the
Borrower is subject to the fulfillment, to the Bank's satisfaction, of all of
the following conditions:
A. Bank shall have received, on or before the date hereof (i) a copy of
the resolutions of the Board of Directors of the Borrower, certified on such
date by an officer of the Borrower, authorizing the execution and delivery of
this Agreement, the borrowings hereunder and the execution and delivery of the
Revolver Note, the Working Capital Note, the Capex Note, the Acquisition 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. Bank shall have received, on or before the date hereof (i) a copy of
the resolutions of the Board of Directors of American Oil and Gas Company,
certified on such date by an officer of such Guarantor, authorizing the
execution and delivery of the guaranty agreement for such Guarantor, and (ii)
such additional documents and requirements as the Bank or counsel for the Bank
may reasonably request.
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C. The Borrower and the Guarantors shall have executed and delivered all
documentation for the Loans and the guaranties, as requested by the Bank, which
shall be in form and content reasonably acceptable to the Bank and its counsel.
D. 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 of Borrower, the business and affairs of Platinum, and the
personal financial condition of Xxxxx X. Xxxx.
E. 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 North Carolina, and has the corporate and legal
authority to own its property and carry on its business as now being conducted.
F. 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.
G. 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 financial statements and internally-prepared quarterly
financial statements submitted to Bank.
H. 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 is subject.
I. The Bank shall have conducted, or caused to be conducted, an audit of
the Borrower's Accounts Receivable, with results that are satisfactory to the
Bank in its sole discretion.
6. 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 North Carolina and
has the power and authority to own its property and to carry on its business in
each jurisdiction in which Borrower does business.
B. Authority and Compliance. Borrower has 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,
respectively. No consent or approval of any public authority or other third
party is
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required as a condition to the validity of any Loan Document, and Borrower is in
compliance with all laws and regulatory requirements to which it is subject.
C. Binding Agreement. This Agreement and the other Loan Documents
executed by Borrower constitute valid and legally binding obligations of
Borrower, 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 proceeding involving Borrower pending or,
to the knowledge of Borrower, threatened before any court or governmental
authority, agency or arbitration authority, except as disclosed to Bank in
writing and acknowledged by Bank prior to the date of this Agreement.
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 and no provision of any existing
agreement, mortgage, indenture or contract binding on Borrower or affecting its
property, which would conflict with or in any way prevent the execution,
delivery or carrying out of the terms of this Agreement and the other Loan
Documents.
F. Ownership of Assets. Borrower has good title to its assets, and
its 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 have been paid or are being contested in good faith by appropriate
proceedings and Borrower has filed all material tax returns which it is
required to file.
H. Financial Statements. The financial statements of Borrower
heretofore delivered to Bank have been prepared in accordance with GAAP applied
on a consistent basis throughout the period involved and fairly present
Borrower's financial condition as of the date or dates thereof, and there has
been no material adverse change in Borrower's financial condition or operations
since July 31, 1997. 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. Borrower's chief executive office is located
at: 000 Xxxxxxxxx Xxxxx Xxxxx, Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000.
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J. Environmental Matters. The conduct of Borrower's 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 will not use or permit any
other party to use any Hazardous Materials at Borrower's places of business
except such materials as are incidental to Borrower's 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 places of business or any other
property of Borrower at any reasonable times upon three (3) days prior notice
for the purposes of conducting an environmental investigation and audit
(including taking physical samples) to insure that Borrower is 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
business operations within five (5) days of the request therefor.
K. No Material Adverse Effect. To the best of the Borrower's
knowledge, neither this Agreement nor any of the Loan Documents, nor any
statements furnished to the Bank by or on behalf of the Borrower in connection
with the Loans or the Loan Documents, contain any untrue statement of a
material fact. To the best knowledge of the Borrower, there is no fact that the
Borrower has not disclosed to the Bank in writing that would have a Material
Adverse Effect.
L. Continuation of Representation and warranties. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the date hereof and at and as of the date of any future
advance under any Loan (except insofar as such representations and warranties
relate expressly to an earlier date, and except for the representations and
warranties in Section 6. D and H, which shall be deemed to be made solely on the
date of this Agreement).
7. 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):
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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) Achieve a Tangible Net Worth, plus subordinated debt, of not less
than $25,000,000 as of October 31, 1998.
(ii) Achieve EBITDA that is not less than:
(a) ($500,000) for the three months ending January 31, 1998;
(b) $-0- for the three months ending April 30, 1998;
(c) $1,600,000 for the three months ending July 31, 1998; and
(d) $1,750,000 for the three months ending October 31, 1998.
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 audited financial statements of Borrower for each
fiscal year of Borrower, within 120 days after the close of each such fiscal
year.
(ii) Furnish to Bank quarterly financial statements (including a balance
sheet and profit and loss statement) of Borrower, which shall be prepared by
Borrower, for each quarter of each fiscal year of Borrower, within 30 days after
the close of each such period.
(iii) 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
13
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 B
attached hereto.
(iv) 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 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 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
14
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.
8. 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 an initial public offering of its capital stock.
B. Transfer of Assets or Control. Sell, lease, sell and leaseback,
assign or otherwise dispose of or transfer any assets, except in the normal
course of its business, or enter into any merger or consolidation, or transfer
control or ownership of the Borrower, or form or acquire any subsidiary,
except for a wholly-owned subsidiary which has executed a guaranty of the
Loans, in form satisfactory to the Bank. Notwithstanding the foregoing, however,
Borrower may dispose of assets formerly used in its distribution business having
an aggregate value of up to $250,000 during the first year after the date
hereof, and up to $50,000 in any subsequent year.
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.
15
D. Extensions of Credit. Make any loan or advance to any individual,
partnership, corporation or other entity, except (i) as previously disclosed to
Bank in writing, and (ii) other loans, not in excess of an aggregate principal
amount of $300,000, in connection with acquisitions made by the Borrower.
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 and
capital leases entered into 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 Affiliates, 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.
F. 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.
G. 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.
9. DEFAULT. Borrower shall be in default under this Agreement and under
each of the other Loan Documents (an "Event of Default") if it shall default in
the payment of any amounts due and owing under the Loans, or any of them.
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 or in any other loan agreement, promissory note, 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 NationsBank Corporation, and such default shall continue uncured for a period
of thirty (30) days. Additionally, it shall constitute an Event of Default
hereunder if the Borrower does not complete an initial public offering of its
capital stock on or before July 31, 1998 and the Borrower's year to date EBITDA
as of such date has resulted in losses greater than $450,000.
16
10. 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.
11. 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
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
ATTN: Xxxx Xxxxxxxxx
Chief Financial Officer
Bank: NationsBank, N.A.
000 Xxxxxxxxx Xxxxxx
Xxxxxxx-Xxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxx, Xx.
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.
12. 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.
13. 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
17
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 and applicable federal
law.
C. Amendment. No modification, consent, amendment or waiver of any
provision of this Loan Agreement, nor consent to any departure by either party
therefrom, shall be effective unless the same shall be in writing and signed by
each party, and then shall be effective only in the specified instance and for
the purpose for which given. This Loan Agreement is binding upon Borrower, its
successors and assigns, and inures to the benefit of Bank, its successors and
assigns; however, no assignment or other transfer of Borrower's rights or
obligations hereunder shall be made or be effective without Bank's prior written
consent, nor shall it relieve Borrower of any obligations hereunder. There is no
third party beneficiary of this Loan Agreement.
D. Documents. All documents, certificates and other items required
under this Loan Agreement to be executed and/or delivered to Bank shall be in
form and content satisfactory to Bank and its counsel.
E. Partial Invalidity. The unenforceability or invalidity of any
provision of this Loan Agreement shall not affect the enforceability or validity
of any other provision herein and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.
F. Indemnification. Borrower shall indemnify, defend and hold Bank
and its successors and assigns harmless from and against any and all claims,
demands, suits, losses, damages, assessments, fines, penalties, costs or other
expenses (including reasonable attorneys' fees and court costs) ("Indemnified
Damages") arising from or in any way related to any of the transactions
contemplated hereby, except Indemnified Damages occurring as a result of willful
or negligent conduct of the Bank, including but not limited to actual or
threatened damage to the environment, agency costs of investigation, personal
injury or death, or property damage, due to a release or alleged release of
Hazardous Materials, arising from Borrower's business operations, any other
property owned by Borrower or in the surface or ground water arising from
Borrower's business operations, or gaseous emissions arising from Borrower's
business operations or any other condition
18
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.
14. 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.
19
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.
15. 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.
[Signatures appear on following page.]
20
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: By: /s/ XXXXX X. XXXX
------------------------------
------------------------------ Title: CEO
Secretary ---------------------------
[Corporate Seal]
BANK:
----
NATIONSBANK, N.A.
By:
------------------------------
Title:
---------------------------
21
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 __ , 1997 in the principal amount of $3,000,000 (the "Revolver Note")
and that promissory note dated December __, 1997 in the principal amount of
$1,000,000 (the "Working Capital Note") shall not exceed the Maximum Amount.
"Maximum Amount" shall mean the lesser of $4,000,000 or the
Borrowing Base. The "Borrowing Base" at any time, shall be equal to 80% of
Eligible Accounts Receivable, plus overadvances up to $1,000,000.
"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
(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.
22
2. Advances. The amounts of advances under the Revolver Note shall be
determined consistent with the value of the Eligible Accounts Receivable, 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 forty-five (45) days
after the end of each fiscal quarter, 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.
Borrower: Bank:
BLUE RHINO CORPORATION NATIONSBANK, N.A.
By: /s/ Xxxx Xxxxxxxxx By:
------------------------ (Seal) --------------------------
Name: Xxxx Xxxxxxxxx Name:
----------------------- -------------------------
Title: CFO Title:
--------------------- -----------------------
EXHIBIT B
COMPLIANCE CERTIFICATE
----------------------
This Compliance Certificate is delivered pursuant to Section 6(B)(iii) of
the Loan Agreement dated as of December __, 1997 (together with all amendments
and modifications, if any, from time to time made thereto, the "Loan
Agreement"), between Blue Rhino Corporation (the "Borrower") and NationsBank,
N.A. The covenants set forth below apply to the Borrower under the Loan
Agreement. Unless otherwise defined, terms used herein (including the
attachments hereto) have the meanings provided in the Loan Agreement.
The undersigned, being the duly elected, qualified and acting Chief
Financial Officer of the Borrower, on behalf of the Borrower and solely in his
or her capacity as an officer of the Borrower, hereby Certifies and warrants
that:
1. He/she is the Chief Financial Officer of the Borrower and that, as
such, he/she is authorized to execute this certificate on behalf of the
Borrower.
2. As of ___________________, 19__:
(a) Tangible Net Worth plus subordinated debt was $_________________;
(b) Borrower's EBITDA for the three months ending as of such
date was $_________________.
(c) The Borrower was not in default of any of the provisions of the
Loan Agreement during the period as to which this Compliance
Certificate relates;
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate, this ______________ day of _______________, 19__.
BLUE RHINO CORPORATION
By:___________________________________
Title: Chief Financial Officer
Blue Rhino Corporation
Schedule of Indebtedness
As of November 30, 1997
-----------------------
Notes Payable
Equipment
AT&T $ 17,953.70
Xxxxxx Financial Corp 8,843.91 26,797.61
-----------
Capital Leases
Handhelds
Nelco 64,561.15
Leasing Innovations 118,470.51
GreenTree 80,675.46 263,707.12
-----------
Suburban Propane 60,450.00
Senior Discount Notes 15,644,715.38
--------------
Total $15,995,670.11
==============
TAXES
The Company previously and currently owned display racks and other property
which was used in counties throughout the United States. In connection with the
ownership and use of these display racks and other property, the Company never
paid any county, local or other municipal property tax. Most of this property
has been sold or leased to the Company's distributors who are now responsible
for the filing and payment of local property taxes in the future. However, given
the small amount of the total tax liability compared with the expense in
preparing the tax filings, the Company has determined that it is in its best
interest not to file returns unless it receives a tax assessment by a county or
other municipalities. The Company has reserved approximately $30,000 for these
tax liabilities which it believes is an adequate amount.
EXHIBIT A-1
BORROWING BASE CERTIFICATE
Status as of ___________________, 19___.
In accordance with the terms of the Borrowing Base Agreement attached as Exhibit
A to that Loan Agreement dated December ___, 1997, by and between blue Rhino
Corporation and NationsBank, N.A., we hereby represent and warrant as follows:
1. Total Accounts Receivable $_____________________
2. Less ineligible accounts receivable
(as set forth in the borrowing Base
Agreement) $_____________________
3. Eligible Accounts Receivable $_____________________
4. a. 80% of Eligible Accounts Receivable, $_____________________
b. plus, up to $1,000,000 overadvance, $_____________________
c. = Total Available: $_____________________
5. Maximum loan amount $4,000,000.00
6. Outstanding balance as of report date $_____________________
7. Available for further advances (lesser of
line 4 or line 5 minus line 6) $_____________________
8. If line 7 is negative, amount to be
repaid immediately to Bank $_____________________
The undersigned does hereby certify that the foregoing is true and correct.
The undersigned does further acknowledge that the Bank is relying upon this
certificate and any supporting documents to grant or continue to grant credit to
it, and further warrants and represents that no event of default has occurred,
or would, with the passage of time or the giving of notice, or both, occur under
the above-referenced Loan Agreement.
Borrower:
BLUE RHINO CORPORATION
By: /s/ Xxxx Xxxxxxxxx
-------------------------------
Name: Xxxx Xxxxxxxxx
-----------------------------
Title: CFO
----------------------------
TAXES
The Company previously and currently owned display racks and other property
which was used in counties throughout the United States. In connection with the
ownership and use of these display racks and other property, the Company never
paid any county, local or other municipal property tax. Most of this property
has been sold or leased to the Company's distributors who are now responsible
for the filing and payment of local property taxes in the future. However, given
the small amount of the total tax liability compared with the expense in
preparing the tax filings, the Company has determined that it is in its best
interest not to file returns unless it receives a tax assessment by a county or
other municipalities. The Company has reserved approximately $30,000 for these
tax liabilities which it believes is an adequate amount.
