CREDIT AGREEMENT
Dated as of March 27, 1998
between
FINISHMASTER, INC.,
and
LDI, LTD.
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CREDIT AGREEMENT
This Credit Agreement dated as of March 27, 1998 is entered into between
FinishMaster, Inc., an Indiana corporation and LDI, Ltd., an Indiana limited
partnership. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"Advance" means a borrowing hereunder consisting of the aggregate amount
of the several Loans made by the Lender to the Borrower of the same Type and, in
the case of Eurodollar Rate Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
capital stock, by contract or otherwise.
"Agreement" means this Credit Agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Prime Rate for such day and (ii) the
sum of (a) the Federal Funds Effective Rate for such day and (b) one-half of one
percent (0.5%) per annum.
"Applicable Eurodollar Margin" means, as at any date of determination, the
Applicable Eurodollar Margin as defined in the Senior Credit Facility.
"Applicable Floating Rate Margin" means, as at any date of determination,
the Applicable Floating Rate Margin as defined in the Senior Credit Facility.
"Authorized Officer" means any of the Chairman, President, Chief Financial
Officer, Treasurer or Assistant Secretary of the Borrower, acting singly.
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"Borrower" means FinishMaster, Inc., an Indiana corporation, together with
its successors and assigns, including a debtor-in-possession on behalf of the
Borrower.
"Borrowing Notice" is defined in Section 2.8 hereof.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Indianapolis,
Indiana and Chicago, Illinois and on which dealings in Dollars are carried on in
the London interbank market and (ii) for all other purposes a day (other than a
Saturday or Sunday) on which banks are open for business in Indianapolis,
Indiana and Chicago, Illinois.
"Closing Date" means the date on which the Revolving Loans are advanced
hereunder.
"Conversion/Continuation Notice" is defined in Section 2.10(D) hereof.
"Default" means an event described in Article V hereof.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
"Eurodollar Base Rate" means, with respect to a Eurodollar Rate Loan for
any specified Interest Period, either (i) the rate of interest per annum equal
to the rate for deposits in U.S. Dollars in the approximate amount of such
Eurodollar Rate Loan with a maturity approximately equal to such Interest Period
which appears on Telerate Page 3750, or, if there is more than one such rate,
the average of such rates rounded to the nearest 1/100 of 1%, as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
or (ii) if no such rate of interest appears on Telerate Page 3750 for any
specified Interest Period, the rate at which deposits in U.S. Dollars are
offered by NBD Bank, N.A. to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of the pro rata share of NBD
Bank, N.A. of such Eurodollar Rate Loan and having a maturity approximately
equal to such Interest Period. The term "Telerate Page 3750" means the display
designated as "Page 3750" on the Associated Press-Dow Xxxxx Telerate Service (or
such other page as may replace Page 3750 on the Associated Press-Dow Xxxxx
Telerate Service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association interest rate settlement rates for U.S. Dollars).
Any Eurodollar Base Rate determined on the basis of the rate displayed on
Telerate Page 3750 in accordance with the foregoing provisions of this
subparagraph shall be subject to corrections, if any, made in such rate and
displayed by the Associated Press-Dow Xxxxx Telerate Service within one hour of
the time when such rate is first displayed by such service.
"Eurodollar Rate" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period plus the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
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"Eurodollar Rate Advance" means an Advance which bears interest at the
Eurodollar Rate.
"Eurodollar Rate Loan" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Lender from three Federal
funds brokers of recognized standing selected by the Lender in its sole
discretion.
"Floating Rate" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day, changing and as the Alternate Base Rate
changes, plus the then Applicable Floating Rate Margin.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"Interest Period" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3) months or, six (6) months commencing on a
Business Day selected by the Borrower pursuant to this Agreement; provided,
however, that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month, as the
case may be. If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.
"Loan(s)" means, any Advance made pursuant to Section 2.2 and any
Revolving Loans hereof, whether made or continued as or converted to Floating
Rate Loans or Eurodollar Rate Loans.
"Loan Documents" means this Agreement, the Note and all other documents,
instruments and agreements executed in connection therewith or contemplated
thereby, as the same may be amended, restated or otherwise modified and in
effect from time to time.
"Note" means the Revolving Note.
"Obligations" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Lender, or any Indemnitee, of
any kind or nature, present or future,
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arising under this Agreement, the Note or any other Loan Document, whether or
not evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification, or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and disbursements, paralegals' fees (in each case whether or not allowed),
and any other sum chargeable to the Borrower under this Agreement or any other
Loan Document.
"Payment Date" means the last Business Day of each calendar quarter.
"Person" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"Prime Rate" means the prime rate of interest announced by NBD Bank, N.A.
from time to time, changing when and as said prime rate changes. The prime rate
announced by NBD Bank, N.A. is merely an index rate and use of the term "prime
rate" shall not imply that it is the lowest rate charged by NBD Bank, N.A. to
any of its customers.
"Rate Option" means the Eurodollar Rate of the Floating Rate.
"Revolving Loan" is defined in Section 2.2 hereof.
"Revolving Loan Commitment" means Ten Million and 00/100 Dollars, as
reduced from time to time pursuant to the terms hereof.
"Revolving Loan Termination Date" means March 27, 1999.
"Revolving Note" means a promissory note, in substantially the form of
Exhibit A hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Revolving Loan Commitment, including any amendment,
restatement, modification, renewal or replacement of such Revolving Note.
"Senior Credit Facility" means the credit facility evidenced by that
certain Credit Agreement dated as of November 19, 1997 among FinishMaster, Inc.,
the institutions from time to time a party thereto and NBD Bank, N.A., as Agent.
"Subordination Agreement" means that certain Supplemental Subordination
Agreement dated March __, 1998 between LDI, Ltd., FinishMaster, Inc., and NBD
Bank, N.A., as Agent for the lenders under the Senior Credit Facility (as the
same may be amended from time to time), with respect to this Agreement.
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"Type" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
1.2 References. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall not in any way be
construed as consent by the Lender or any Lender to the establishment,
maintenance or acquisition of any Subsidiary, except as may otherwise be
permitted hereunder.
ARTICLE II: THE REVOLVING LOAN FACILITIES
2.1. Purpose. The purpose of this Agreement is to set forth the terms and
conditions upon which the Lender shall make the Revolving Loans.
2.2 Revolving Loans. Prior to the Termination Date, the Lender jointly
agrees, on the terms and conditions set forth in this Agreement, to make
revolving loans to the Borrower from time to time, in Dollars, in an amount not
to exceed the Revolving Credit Commitment at such time (each individually, a
"Revolving Loan" and, collectively, the "Revolving Loans"). Subject to the terms
of this Agreement, the Borrower may borrow, repay and reborrow Revolving Loans
at any time prior to the Termination Date. The Revolving Loans made on the
Closing Date shall initially be Floating Rate Loans and thereafter may be
continued as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in Section 2.10 and subject to the other conditions and
limitations therein set forth and set forth in this Article II. On the
Termination Date, the Borrower shall repay in full the outstanding principal
balance of the Revolving Loans.
2.3 [Reserved].
2.4 Rate Options for all Advances. The Revolving Loans may be Floating
Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by
the Borrower in accordance with Section 2.10. The Borrower may select, in
accordance with Section 2.10, Rate Options and Interest Periods applicable to
portions of the Revolving Loans and the Term Loans; provided that there shall be
no more than eight (8) Interest Periods in effect with respect to all of the
Loans at any time.
2.5 Optional Payments; Mandatory Prepayments.
(A) Optional Payments. The Borrower may from time to time repay or prepay,
without penalty or premium all or any part of outstanding Floating Rate
Advances. Eurodollar Rate Advances may be voluntarily repaid or prepaid prior to
the last day of the applicable Interest Period, subject to the indemnification
provisions contained in subsection (B) below, provided, that the Borrower may
not so prepay Eurodollar Rate Advances unless it shall have provided at least
three Business Days' written notice to the Lender of such prepayment.
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(B) Funding Indemnification. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lender, the Borrower indemnifies each Lender for any loss or
cost incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain the
Eurodollar Rate Advance.
2.6 Reduction of Commitments. The Borrower may permanently reduce the
Revolving Loan Commitment in whole, or in part, in an aggregate minimum amount
of $1,000,000 and integral multiples of $100,000 in excess of that amount
(unless the Revolving Loan Commitment is reduced in whole), upon at least one
Business Day's written notice to the Lender, which notice shall specify the
amount of any such reduction; provided, however, that the amount of the
Revolving Loan Commitment may not be reduced below the aggregate principal
amount of the outstanding Revolving Credit Obligations. All accrued commitment
fees shall be payable on the effective date of any termination of the
obligations of the Lender to make Loans hereunder.
2.7 [Reserved].
2.8 Method of Selecting Types and Interest Periods for Advances. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Lender irrevocable notice in the form of Exhibit B
hereto (a "Borrowing Notice") not later than 9:30 a.m. (Indianapolis time) (a)
on the Borrowing Date of each Floating Rate Advance and (b) three Business Days
before the Borrowing Date for each Eurodollar Rate Advance, specifying: (i) the
Borrowing Date (which shall be a Business Day) of such Advance; (ii) the
aggregate amount of such Advance; (iii) the Type of Advance selected; and (iv)
in the case of each Eurodollar Rate Advance, the Interest Period applicable
thereto. The Borrower shall select Interest Periods so that, to the best of the
Borrower's knowledge, it will not be necessary to prepay all or any portion of
any Eurodollar Rate Advance prior to the last day of the applicable Interest
Period in order to make mandatory prepayments as required pursuant to the terms
hereof. Each Floating Rate Advance and all Obligations other than Loans shall
bear interest from and including the date of the making of such Advance to (but
not including) the date of repayment thereof at the Floating Rate, changing when
and as such Floating Rate changes. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Loan will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar Rate
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such Eurodollar Rate
Advance.
2.9 Minimum Amount of Each Advance. Each Advance shall be in the minimum
amount of $500,000 (and in multiples of $100,000 if in excess thereof),
provided, however, that any Floating Rate Advance may be in the amount of the
unused Aggregate Revolving Loan Commitment.
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2.10 Method of Selecting Types and Interest Periods for Conversion and
Continuation of Advances.
(A) Right to Convert. The Borrower may elect from time to time, subject to
the provisions of Section 2.4 and this Section 2.10, to convert all or any part
of a Loan of any Type into any other Type or Types of Loans; provided that any
conversion of any Eurodollar Rate Advance shall be made on, and only on, the
last day of the Interest Period applicable thereto.
(B) Automatic Conversion and Continuation. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Lender notice in accordance with Section 2.10(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
(C) No Conversion Post-Default or Post-Unmatured Default. Notwithstanding
anything to the contrary contained in Section 2.10(A) or Section 2.10(B), no
Loan may be converted into or continued as a Eurodollar Rate Loan (except with
the consent of the Lender) when any Default or Unmatured Default has occurred
and is continuing.
(D) Conversion/Continuation Notice. The Borrower shall give the Lender
irrevocable notice (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Indianapolis time) three Business Days
prior to the date of the requested conversion or continuation, specifying: (1)
the requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued and the duration of the Interest Period applicable
thereto.
2.11 Default Rate. After the occurrence and during the continuance of a
Default, at the option of the Lender, the interest rate(s) applicable to the
Obligations shall be increased by two percent (2.0%) per annum above the
Floating Rate or Eurodollar Rate, as applicable.
2.12 Method of Payment. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Lender at the Lender's address specified
herein, by 2:00 p.m. (Indianapolis time) on the date when due.
2.13 Note. The Lender is authorized to record the principal amount of each
of its Loans and each repayment with respect to its Loans on the schedule
attached to the Note; provided, however, that the failure to so record shall not
affect the Borrower's obligations under any such Note.
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2.14 Telephonic Notices. The Borrower authorizes the Lender to extend
Advances, effect selections of Types of Advances and to transfer funds based on
telephonic notices made by any person or persons the Lender or any Lender in
good faith believes to be acting on behalf of the Borrower. The Borrower agrees
to deliver promptly to the Lender a written confirmation, signed by an
Authorized Officer, if such confirmation is requested by the Lender or any
Lender, of each telephonic notice. If the written confirmation differs in any
material respect from the action taken by the Lender, (i) the telephonic notice
shall govern absent manifest error and (ii) the Lender or the Lender, as
applicable, shall promptly notify the Authorized Officer who provided such
confirmation of such difference.
2.15 Promise to Pay; Interest Payment Dates; Interest and Fee Basis;
Taxes; Loan and Control Accounts.
(A) Promise to Pay. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Note.
(B) Interest Payment Dates. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof, and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity. Interest accrued on each Eurodollar Rate Loan having an Interest
Period longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest accrued on the
principal balance of all other Obligations shall be payable in arrears (i) on
the last day of each calendar month, commencing on the first such day following
the incurrence of such Obligation, (ii) upon repayment thereof in full or in
part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
2.16 Termination Date. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, and all
financing arrangements among the Borrower and the Lender shall have been
terminated, all of the rights and remedies under this Agreement and the other
Loan Documents shall survive.
ARTICLE III: CONDITIONS PRECEDENT
3.1 Each Advance. The Lender shall not be required to make any Advance,
unless on the applicable Borrowing Date there exists no Default or Unmatured
Default and the representations and warranties contained in Article IV continue
to be true and correct in all material respects.
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ARTICLE IV: REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to make
the Loans and the other financial accommodations to the Borrower and to issue
the Letters of Credit described herein, the Borrower represents and warrants as
follows to each Lender and the Lender as of the Closing Date, and thereafter on
each date as required by Article III.
4.1 Organization; Corporate Powers. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in
existence under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect, and
(iii) has all requisite corporate power and authority to own, operate and
encumber its property and to conduct its business as presently conducted and as
proposed to be conducted.
4.2 Authority. The Borrower and each of its Subsidiaries has the requisite
corporate power and authority to execute, deliver and perform each of the Loan
Documents.
4.3 Enforceability. The Loan Documents are enforceable against the
Borrower in accordance with their respective terms.
ARTICLE V: DEFAULTS
5.1 Defaults. Each of the following occurrences shall constitute a Default
under this Agreement:
(A) Failure to Make Payments When Due. The Borrower shall (i) fail to pay
when due any of the Obligations consisting of principal with respect to the
Loans or (ii) shall fail to pay within three (3) Business Days of the date when
due any of the other Obligations under this Agreement or the other Loan
Documents.
(B) Other Defaults. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement, and such default shall
continue for thirty (30) days after the occurrence thereof.
(C) Default as to Other Indebtedness. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness the outstanding principal amount of which Indebtedness is in
excess of $2,500,000 ("Cross Default Indebtedness"), or any breach, default or
event of default shall occur, or any other condition shall exist under any
instrument, agreement or indenture pertaining to any such Cross Default
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Borrower offer to purchase such Cross Default
Indebtedness or other required repurchase of such Cross Default Indebtedness, or
permit the
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holder(s) of such Cross Default Indebtedness to accelerate the maturity of any
such Cross Default Indebtedness or require a redemption or other repurchase of
such Cross Default Indebtedness; or any such Cross Default Indebtedness shall be
otherwise declared to be due and payable (by acceleration or otherwise) or
required to be prepaid, redeemed or otherwise repurchased by the Borrower or any
of its Subsidiaries (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof.
(D) Involuntary Bankruptcy; Appointment of Receiver, Etc.
(i) An involuntary case shall be commenced against the
Borrower or any of the Borrower's Subsidiaries and the petition shall
not be dismissed, stayed, bonded or discharged within sixty (60) days
after commencement of the case; or a court having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Borrower or any of the Borrower's Subsidiaries in an involuntary case,
under any applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the
Borrower or any of the Borrower's Subsidiaries or over all or a
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be entered; or an interim receiver,
trustee or other custodian of the Borrower or any of the Borrower's
Subsidiaries or of all or a substantial part of the property of the
Borrower or any of the Borrower's Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after
entry, appointment or issuance.
(E) Voluntary Bankruptcy; Appointment of Receiver, Etc. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors or (v) take any corporate
action to authorize any of the foregoing.
(F) Judgments and Attachments. Any money judgment(s) (other than a money
judgment covered by insurance as to which the insurance company has not
disclaimed or reserved the right to disclaim coverage), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $2,500,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
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(G) Dissolution. Any order, judgment or decree shall be entered against
the Borrower decreeing its involuntary dissolution or split up and such order
shall remain undischarged and unstayed for a period in excess of sixty (60)
days; or the Borrower shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(H) Loan Documents. At any time, for any reason, any Loan Document as a
whole that materially affects the ability of the Lender to enforce the
Obligations ceases to be in full force and effect or the Borrower or any of the
Borrower's Subsidiaries party thereto seeks to repudiate its obligations
thereunder.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with Section 6.3.
ARTICLE VI: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS
AND REMEDIES
6.1 Termination of Commitments; Acceleration. If any Default described in
Section 5.1(D) or 5.1(E) occurs with respect to the Borrower, the obligations of
the Lender to make Loans hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Lender. If any other Default occurs, the Lender may
terminate or suspend the obligations of the Lender to make Loans hereunder, or
declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower expressly
waives.
6.2 Amendments. Subject to the provisions of this Article VI, the Lender
and the Borrower may enter into agreements supplemental hereto for the purpose
of adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lender or the Borrower hereunder or waiving any Default
hereunder.
6.3 Preservation of Rights. No delay or omission of the Lender to exercise
any right under the Loan Documents shall impair such right or be construed to be
a waiver of any Default or an acquiescence therein, notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lender required pursuant to Section 6.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Lender until the Obligations have been paid in full.
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ARTICLE VII: GENERAL PROVISIONS
7.1 Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
7.2 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
7.3 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Lender and supersede all prior agreements
and understandings among the Borrower, and the Lender relating to the subject
matter thereof.
7.4 Expenses; Indemnification.
(A) Expenses. The Borrower shall reimburse the Lender for any reasonable
costs, charges for internal legal services and out-of-pocket expenses (including
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Lender, which attorneys and paralegals may be employees of the Lender) paid
or incurred by the Lender in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Lender for any costs, internal charges and out-of-pocket expenses (including
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Lender, which attorneys and paralegals may be employees of the Lender) paid
or incurred by the Lender in connection with the collection of the Obligations
and enforcement of the Loan Documents.
(B) Indemnity. The Borrower further agrees to defend, protect, indemnify,
and hold harmless the Lender and each of their respective Affiliates, and each
of the Lender's, or Affiliate's respective officers, directors, employees,
attorneys and Lender (collectively, the "Indemnitees") from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses of any kind or nature whatsoever (including,
without limitation, the fees and disbursements of counsel for such Indemnitees
in connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of:
(i) this Agreement, or any act, event or transaction related
or attendant thereto or to the making of the Loans; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or
wanton injury, damage or threat to the environment, natural
resources or public health or welfare, costs and expenses
(including, without limitation, attorney, expert and consulting fees
and costs of investigation, feasibility or remedial action studies),
fines,
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penalties and monetary sanctions, interest, direct or indirect,
known or unknown, absolute or contingent, past, present or future
relating to violation of any environmental, health or safety
Requirements of Law arising from or in connection with the past,
present or future operations of the Borrower, its Subsidiaries or
any of their respective predecessors in interest, or, the past,
present or future environmental, health or safety condition of any
respective property of the Borrower or its Subsidiaries, the
presence of asbestos-containing materials at any respective property
of the Borrower or its Subsidiaries or the Release or threatened
Release of any Contaminant into the environment (collectively, the
"Indemnified Matters");
provided, however, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused solely by or resulting
solely from the willful misconduct or Gross Negligence of such Indemnitee or
breach of contract by such Indemnitee with respect to the Loan Documents, in
each case, as determined by the final non-appealed judgment of a court of
competent jurisdiction. If the undertaking to indemnify, pay and hold harmless
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrower shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all Indemnified Matters incurred by the Indemnitees.
(C) Survival of Agreements. The obligations and agreements of the Borrower
under this Section 10.7 shall survive the termination of this Agreement.
7.5 Severability of Provisions. Any provision in any Loan Document that is
held to be inoperative, unenforceable, or invalid in any jurisdiction shall, as
to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
7.6 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE LENDER ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE
CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF INDIANA.
7.7 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH OF THE
PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, MAY BE RESOLVED EXCLUSIVELY BY
STATE OR FEDERAL COURTS
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LOCATED IN INDIANAPOLIS, INDIANA, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
INDIANAPOLIS, INDIANA. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES BROUGHT
PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE LENDER SHALL HAVE
THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL JURISDICTION OVER THE
BORROWER OR (2) REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER
AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING
BROUGHT BY SUCH PERSON TO REALIZE ON ANY SECURITY FOR THE OBLIGATIONS OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH
PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) VENUE. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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7.8 SUBORDINATION. THE OBLIGATIONS UNDER THIS AGREEMENT ARE SUBORDINATED
TO CERTAIN SENIOR INDEBTEDNESS TO THE EXTENT AND ON THE TERMS SET FORTH IN THE
SUBORDINATION AGREEMENT.
ARTICLE VI: NOTICES
6.1 Giving Notice. Except as otherwise permitted herein, all notices and
other communications provided to any party hereto under this Agreement or any
other Loan Documents shall be in writing or by telex or by facsimile and
addressed or delivered to such party at its address set forth below its
signature hereto or at such other address as may be designated by such party in
a notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid, shall be deemed given when received; any notice, if transmitted
by telex or facsimile, shall be deemed given when transmitted (answerback
confirmed in the case of telexes).
6.2 Change of Address. The Borrower and the Lender may each change the
address for service of notice upon it by a notice in writing to the other
parties hereto.
ARTICLE VII: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower and the Lender.
[Remainder of This Page Intentionally Blank]
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IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement as of the date first above written.
FINISHMASTER, INC.,
as the Borrower
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Xxxxx X. Xxxxxxx,
Vice President Finance
Address:
0000 00xx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
LDI, LTD.,
as Lender
By: LDI Management, Inc.
------------------------------
By: /s/ Xxxxx X. Xxxx
------------------------------
Xxxxx X. Xxxx, Chairman and CEO
Address:
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
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EXHIBIT A
TO
CREDIT AGREEMENT
Form of Revolving Note
THE OBLIGATIONS UNDER THIS NOTE ARE SUBORDINATED TO CERTAIN SENIOR INDEBTEDNESS
TO THE EXTENT AND ON THE TERMS SET FORTH IN THAT CERTAIN SUPPLEMENTAL
SUBORDINATION AGREEMENT DATED AS OF MARCH 27, 1998, BY AND AMONG LDI, LTD.,
FINISHMASTER, INC. AND NBD BANK, N.A., AS AGENT, AS SUCH AGREEMENT IS FROM TIME
TO TIME AMENDED.
REVOLVING NOTE
U.S. $10,000,000 Indianapolis, Indiana
March 27, 1998
FOR VALUE RECEIVED, the undersigned, FINISHMASTER, INC., an Indiana
corporation (the "Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the
order of LDI LTD., an Indiana limited partnership (the "Lender") the principal
sum of TEN MILLION DOLLARS ($10,000,000), or, if less, the aggregate unpaid
amount of all "Revolving Loans" (as defined in the Credit Agreement referred to
below) made by the Lender to the Borrower pursuant to Section 2.2 of the "Credit
Agreement" (as defined below) on the "Revolving Loan Termination Date" (as
defined in the Credit Agreement), or on such earlier date as may be required by
the terms of the Credit Agreement. Capitalized terms used herein and not
otherwise defined herein are as defined in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of each Revolving Loan from the date of such Revolving Loan until such principal
amount is paid in full at a rate or rates per annum determined in accordance
with the terms of the Credit Agreement. Interest hereunder is due and payable at
such times and on such dates as set forth in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to the Agent (as defined below), to such domestic account as
the Agent may designate, in same day funds. At the time of each Revolving Loan,
and upon each payment or prepayment of principal of each Revolving Loan, the
Lender shall make a notation either on the schedule attached hereto and made a
part hereof, or in such Lender's own books and records, in each case specifying
the amount of such Revolving Loan, the respective Interest Period thereof, in
the case of Eurodollar Rate Loans, or the amount of principal paid or prepaid
with respect to such Revolving Loan, as the case may be; provided that the
failure of the Lender to make any such recordation or notation shall not affect
the Obligations of the Borrower hereunder or under the Credit Agreement.
This Revolving Note is one of the "Revolving Note" referred to in,
and is entitled to the benefits of, the Credit Agreement dated as of March 27,
1998 (as amended, restated, supplemented or modified from
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time to time, the "Credit Agreement") among the Borrower and the Lender. The
Credit Agreement, among other things, (i) provides for the making of Revolving
Loans by the Lender to the Borrower from time to time in an aggregate amount not
to exceed at any time the outstanding U.S. Dollar amount first above mentioned,
the indebtedness of the Borrower resulting from each such Revolving Loan being
evidenced by this Revolving Note and (ii) contains provisions for acceleration
of the maturity hereof upon the happening of certain stated events and also for
prepayments of the principal hereof prior to the maturity hereof, without
penalty or premium, upon the terms and conditions therein specified.
Demand, presentment, protest and notice of nonpayment are hereby
waived by the Borrower.
Whenever in this Revolving Note reference is made to the Agent, the
Lender or Borrower, such reference shall be deemed to include, as applicable, a
reference to their respective successors and assigns permitted pursuant to the
Credit Agreement. The provisions of this Revolving Note shall be binding upon
and shall inure to the benefit of said successors and assigns. Borrower's
successors and assigns shall include, without limitation, a receiver, trustee or
debtor in possession of or for Borrower.
This Revolving Note shall be governed by, interpreted and enforced,
and the rights and liabilities of the parties hereto determined, in accordance
with the internal laws (without regard to the conflicts of law provisions) of
the State of Indiana.
FINISHMASTER, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President - Finance
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SCHEDULE OF REVOLVING LOANS AND PAYMENTS OR PREPAYMENTS
Amount of
Interest Principal Unpaid
Amount of Type of Period/ Paid or Principal Notation
Date Loan Loan Rate Prepaid Balance Made By
---- ---- ---- ---- ------- ------- -------
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EXHIBIT B
TO
CREDIT AGREEMENT
Form of Borrowing Notice
TO: LDI, LTD., as lender (the "Lender"), under that certain Credit
Agreement dated as of March 27, 1998 (the "Credit Agreement") by and
among FinishMaster, Inc. (the "Borrower") and the Lender (such Credit
Agreement, as the same may be amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement")
The Borrower hereby gives to the Lender a Borrowing Notice pursuant
to Section 2.8 of the Credit Agreement, and Borrower hereby requests to borrow
on , (the "Borrowing Date") from the Lender on a pro rata basis an aggregate
principal amount of:
$ in Revolving Loans as a
---
---Floating Rate Advance
---
---Eurodollar Advance
o Applicable Interest Period of month(s).
The Borrower hereby represents and warrants that the conditions
contained in Article III have been satisfied.
Unless otherwise defined herein, terms defined in the Credit
Agreement shall have the same meanings in this Notice.
Dated: ,
FINISHMASTER, INC.
By:
------------------------------
Name:
Title:
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