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EXHIBIT 4.04(c)
October 18, 1995
Olympus Private Placement Fund, L.P.
Metro Center
Xxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: Amended and Restated Amendment to Note Purchase Agreement
Ladies and Gentlemen:
Reference is made to the letter amendment dated September 21, 1995, as
heretofore amended (the "Amendment"), to the Note Purchase Agreement dated July
2, 1991, as heretofore amended (the "Agreement"), between LDI Corporation (the
"Company") and Olympus Private Placement Fund, L.P. (the "Purchaser").
Capitalized terms used herein and not otherwise defined have the meanings set
forth in the Agreement. As you are aware, the Required Lenders (as defined in
the Amendment) have indicated to the Company that they will not consent to the
Amendment, and the Company and the Purchaser have agreed to revise the
Amendment as set forth below. Accordingly, the Company and the Purchaser
hereby agree that the Amendment is amended and restated to read in its entirety
as follows:
The Company and the Purchaser (which acknowledges that it is the
holder of all of the outstanding Notes issued by the Company to the Purchaser
under the Agreement) hereby agree that the Agreement is amended as follows:
1. The definition of "Credit Agreement" in Article I of the Agreement
is hereby amended to read in its entirety as follows:
"CREDIT AGREEMENT" shall mean the Third Amended and
Restated Credit Agreement dated as of July 21, 1995 among
the Company, certain lending institutions as the lenders and
National City Bank and Society National Bank, as Co-Agents
for such lenders, as amended from time to time.
2. Section 2A of the Agreement is hereby amended by deleting the
second sentence thereof and inserting in its place the following:
The Notes shall be dated the date of issue, shall mature on
the Maturity Date, shall bear interest on the unpaid balance
thereof (i) from the date thereof to and including July 31,
1995 at the rate of 9-3/8% per annum, payable semi-annually in
arrears on each February 15 and August 15, beginning August
15, 1995, and (ii) from August 1, 1995 until the principal
thereof shall have become due and payable at the rate of
12-3/4% per annum, payable quarterly in arrears on each
February 15, May 15, August 15 and November 15, beginning
November 15, 1995, plus additional interest in the amount of
$75,000 payable on September 28, 1995, and shall be
substantially in the form of Exhibit A attached hereto;
PROVIDED, HOWEVER, that to the extent permitted by applicable
law interest shall be due and payable on any overdue
installment of principal or interest at a rate of 13% per
annum from the date such payment was due until paid, payable
on demand.
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3. Section 4B of the Agreement is hereby amended by changing the
percentage therein applicable to the period August 15, 1995 to August 14, 1996
from "107.50" to "109.375".
4. Sections 5C, 5D, 5E and 5F of the Agreement are hereby deleted in
their entirety. Sections 5G through 5T shall not be renumbered.
5. The Notes are hereby renamed "12-3/4% Subordinated Notes due August
15, 2000" and may be so referred to in the Company's financial statements and
elsewhere. The form of Note attached to the Agreement as Exhibit A and the
currently outstanding Note held by the Purchaser are hereby amended to read in
their entirety as set forth in Exhibit A to this amendment. Promptly upon
receipt of the substitute Note referred to in paragraph 9(f) below, the
Purchaser will return to the Company the currently outstanding Note.
6. The Warrants are hereby amended by (i) amending the form of Warrant
Certificate attached to the Agreement as Exhibit B and all of the outstanding
Warrants to read in their entirety as set forth in Exhibit D to this amendment,
(ii) changing the date and time at which the Warrants will terminate and become
null and void from 5:00 p.m., New York time, on August 15, 1996 to 5:00 p.m.,
New York time, on August 15, 1998, and (iii) changing the Exercise Price (as
defined in the form of Warrants) from $6.35 to $5.00. Promptly upon receipt of
the substitute Warrant Certificate referred to in paragraph 9(f) below, the
Purchaser will return to the Company the currently outstanding Warrants.
7. Section 11D of the Agreement is hereby amended by changing the
figure "$5,000,000" in the third proviso therein to "$2,500,000".
8. All of the terms and conditions of the Agreement, the Notes and the
Warrants (including, without limitation, the provisions of Article XI of the
Agreement) shall remain in full force and effect as amended and supplemented
hereby.
9. This amendment shall become effective immediately upon satisfaction
of all of the following conditions precedent:
(a) The Company and the Purchaser shall have executed this
Amendment.
(b) The Company shall have paid to the Purchaser, in immediately
available funds, additional interest on the Note in the amount
of Seventy-Five Thousand Dollars ($75,000).
(c) Xxxxxx X. Xxxxxxx, the Purchaser and the Company shall have
executed and delivered a Severance Payment Subordination
Agreement in the form of Exhibit B attached to this amendment.
(d) Xxxxxx X. Cutter, the Purchaser and the Company shall have
executed and delivered a Severance Payment Subordination
Agreement in the form of Exhibit C attached to this amendment.
(e) The Required Lenders, as defined in the Third Amended and
Restated Credit Agreement dated as of July 21, 1995, shall
have consented to this amendment.
(f) The Company shall have delivered to the Purchaser a substitute
Note in the form of Exhibit A attached to this amendment and a
substitute Warrant Certificate in the form of Exhibit D
attached to this amendment.
(g) The Company shall have paid, or reimbursed the Purchaser for,
the reasonable fees and expenses of counsel for the Purchaser
in connection with the preparation, negotiation, execution and
delivery of this amendment.
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(h) The Company shall have delivered to the Purchaser a
certificate in the form of Exhibit E attached to this
amendment, signed by the President and Chief Executive Officer
of the Company.
10. Upon the execution of this amendment, the covenants set forth in
Sections 5C, 5D, 5E and 5F of the Agreement as they apply as at July 31, 1995
and for the fiscal quarter then ended shall be deemed to be waived through the
earlier of (i) the effectiveness of this amendment in accordance with its terms
or (ii) November 1, 1995, but not thereafter.
Please indicate your agreement with the foregoing by executing this
amendment in the space provided below and returning a signed copy to the
Company.
Sincerely,
LDI CORPORATION
By: Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
ACCEPTED AND AGREED:
OLYMPUS PRIVATE PLACEMENT FUND, L.P.
By: OGP Partners, L.P., its General Partner
By: ________________________________________
Title: _____________________________________
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EXHIBIT A
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
neither the securities nor any interest therein may be sold,
transferred, pledged or otherwise disposed of in the absence
of such registration or an exemption under such Act and the
rules and regulations thereunder. The transfer of such
securities is subject to the restrictions set forth in Article
XI of that certain Note Purchase Agreement, dated July 2,
1991, as amended, between LDI Corporation and Olympus Private
Placement Fund, L.P., copies of which are available for
inspection at the offices of LDI Corporation, and such
securities may be transferred only in compliance with the
terms and conditions of said Article XI of said Note Purchase
Agreement.
LDI Corporation
12-3/4% Subordinated Note
Due August 15, 2000
No. 2
$10,000,000 July 2, 1991
FOR VALUE RECEIVED, the undersigned, LDI Corporation (herein called
the "Company"), a corporation organized and existing under the laws of the
State of Delaware, hereby promises to pay to Olympus Private Placement
Fund, L.P. or registered assigns, the principal sum of Ten Million Dollars
($10,000,000) on August 15, 2000, with interest (computed on the basis of the
number of days actually elapsed and a 365- or 365-day year, as applicable) on
the unpaid balance thereof (i) from the date of issuance hereof to and
including July 31, 1995 at the rate of 9-3/8% per annum, payable semi-annually
in arrears on each February 15 and August 15, beginning August 15, 1991, and
(ii) from August 1, 1995 until the principal hereof shall have become due and
payable at the rate of 12-3/4% per annum, payable quarterly in arrears on each
February 15, May 15, August 15 and November 15, beginning November 15, 1995,
plus additional interest in the amount of $75,000 payable on September 28,
1995; PROVIDED, HOWEVER, that to the extent permitted by applicable law
interest shall be due and payable on any overdue installment of principal or
interest at a rate of 13% per annum from the date such payment was due until
paid, payable on demand. This Note is subject to mandatory and optional
prepayment at the times, in the amounts and subject to the conditions set forth
in the Agreement (as hereinafter defined).
Payments of both principal and interest are to be made by wire
transfer to the Connecticut National Bank, One Landmark Square, Stamford,
Connecticut for the account of Olympus Private Placement Fund, L.P., Account
Number 5023-1397, or in such other manner or to such other place as the holder
hereof shall designate to the Company in writing, in lawful money of the United
States of America.
This Note is one of a duly authorized issue of Subordinated Notes due
August 15, 2000 of the Company, originally issued pursuant to a Note Purchase
Agreement dated July 2, 1991, as amended (the "Agreement"), between the Company
and Olympus Private Placement
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Fund, L.P., and is entitled to the benefits of the Agreement, and each holder
of this Note, by his acceptance hereof, agrees to be bound by the provisions of
the Agreement. As provided in the Agreement, (i) this Note is subject to
prepayment, in whole or in part, as specified in such Agreement, (ii) the
payment of the principal of, premium, if any, and interest on this Note is
expressly subordinated on the terms and conditions set forth in the Agreement
to the payment of all Senior Indebtedness of the Company, as defined in the
Agreement, and (iii) this Note may be transferred only upon fulfillment by the
Company and the holder hereof of conditions specified in the Agreement.
As provided and subject to the restrictions on transfer set forth in
the Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or his attorney duly authorized in writing, a new
Note for a like principal amount will be issued to, and registered in the name
of, the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
This Note shall be governed by and enforced in accordance with the
laws of the State of Ohio.
The Company agrees to make prepayments of the Notes on the dates and
in the amounts specified in the Agreement.
Should the indebtedness represented by this Note or any part thereof
be collected in any proceeding provided for in the Agreement or be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition
to the principal, premium, if any, and interest due and payable hereon, all
costs of collecting this Note, including reasonable attorney's fees and
expenses.
In case an Event of Default, as defined in the Agreement, shall occur
and be continuing, this Note may be declared due and payable in the amount, in
the manner and with the effect provided in the Agreement.
LDI Corporation
By: _______________________________
Title:
By: _______________________________
Title:
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EXHIBIT B
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SEVERANCE PAYMENT SUBORDINATION AGREEMENT
This Severance Payment Subordination Agreement (this
"Agreement") is entered into between XXXXXX X. XXXXXXX, whose address is
0000 Xxxxxxxxx Xxxx, Xxxxxx Xxxx, Xxxx 00000 (the "Executive"), and OLYMPUS
PRIVATE PLACEMENT FUND, L.P., a Delaware limited partnership having its
principal office at Metro Center, Xxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx
00000 (the "Lender," which term as used herein shall include any holder or
holders from time to time of the Notes (as hereinafter defined)).
W I T N E S S E T H:
WHEREAS, the Executive is a director and stockholder of LDI
Corporation, a Delaware corporation (the "Borrower"), and is financially
interested in the Borrower in that the Borrower is now and may hereafter
be indebted or otherwise obligated to the Executive, both for director fees
and pursuant to the terms of that certain Compensation Plan and Severance
Agreement between the Borrower and the Executive, dated as of December 9,
1994, as amended by an amendment dated as of July 21, 1995 (the "Severance
Agreement") (the Severance Agreement and all other agreements, instruments
or other documents now or, with the prior consent of the Lender, hereafter
executed in connection therewith being collectively referred to herein as
the "Junior Debt Documents");
WHEREAS, the Borrower is presently indebted to the Lender as a
result of the advance of monies and other extensions of credit and
financial accommodations provided by the Lender pursuant to that certain
Note Purchase Agreement dated July 2, 1991 (as the same may hereafter be
amended, amended and restated, supplemented or otherwise modified from
time to time, the "Note Purchase Agreement") (all capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to
such terms in the Note Purchase Agreement), and the Borrower is not in
compliance with certain financial covenants in the Note Purchase Agreement.
WHEREAS, the Lender has agreed to amend the Note Purchase
Agreement so that the Borrower is not in violation thereof, on certain
conditions, including the condition that the Executive execute and deliver
this Agreement; and
WHEREAS, the Executive aclmowledges that the loan or advance of
monies or other extension of any financial accommodation or credit to the
Borrower by the Lender and such amendment of the Note Purchase Agreement
are of value to the Executive;
NOW THEREFORE, for good and valuable consideration, receipt
of which is hereby acknowledged by the Executive, and in order to induce
the Lender to amend the Note Purchase Agreement, the Executive and the
Lender hereby agree as follows:
1. Standby; Subordination; Subrogation. The Executive will
not ask, demand, xxx for, take or receive from the Borrower (or from any
guarantor with respect to the Borrower), by setoff or in any other manner,
the whole or any part of any monies which may now or hereafter be owing by
the Borrower (including but not limited to, any dividends in
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respect of any capital stock of the Borrower which is owned either directly or
beneficially by the Executive, except as otherwise permitted under the Note
Purchase Agreement), or any successor or assign of the Borrower, including,
without limitation, a receiver, custodian, trustee or debtor in possession
(the term "Borrower" hereinafter shall include any such successor or assign of
the Borrower) to the Executive or be owing by any other person, firm,
partnership or corporation to the Executive for the benefit of the Borrower
(whether such amounts represent principal or interest, or obligations which are
due or not due, direct or indirect, absolute or contingent), including,
without limitation, the taking of any negotiable instruments evidencing such
amounts ( all such indebtedness, obligations and liabilities being hereinafter
referred to as the "Indebtedness"), nor any security for any of the foregoing,
unless and until all Liabilities (as defined below) shall have been fully paid
and satisfied. As used herein, the term "liabilities" means all obligations,
liabilities and indebtedness (including, but not limited to, all principal,
premiums (if any), interest, penalties, fees, expenses and charges), whether
absolute of contingent, payable directly or indirectly by the Borrower, owing
to the Lender, whether outstanding on the date of this Agreement or hereafter
created, incurred or assumed by the Borrower under the terms of the Note
Purchase Agreement and the Notes (as defined in the Note Purchase Agreement),
including any renewals, extensions, refundings, deferrals, replacements,
restructuring, amendments, modifications and refinancing of the above defined
Liabilities. All rights, liens and security interests of the Executive, whether
now or hereafter arising and howsoever existing, in any assets of the Borrower
or any assets securing the Liabilities shall be and hereby are subordinated to
the rights and interests of the Lender, in those assets, and the Executive
shall have no right to possession of any such assets or to foreclose upon any
such assets, whether by judicial action or otherwise, unless and until all of
the Liabilities shall have been fully paid and satisfied. The Executive also
hereby agrees that, regardless of whether the Liabilities are secured or
unsecured, the Lender shall be subrogated for the Executive with respect to the
Executive's claims against the Borrower for the Indebtedness and the
Executive's rights, liens and security interest, if any, in any of the
Borrower's assets and the proceeds thereof until all of the Liabilities shall
have been fully paid and satisfied. The Executive acknowledges and agrees
that, to the extent of the terms and provisions of the Note Purchase Agreement
and this Agreement are inconsistent with the terms and provisions of any of the
Junior Debt Documents, the terms and provisions of the Junior Debt Documents
shall be deemed to have been superseded.
2. INDEBTEDNESS OWED ONLY TO THE EXECUTIVE. The Executive warrants and
represents that the Executive has not previously assigned any interest
in the Indebtedness, that no other party owns an interest in the Indebtedness
other than the Executive (whether as joint holders of the Indebtedness,
participants or otherwise) and that the entire Indebtedness is and shall
continue to be owing only to the Executive. The Executive further warrants and
represents that the Indebtedness is not and shall not be secured by any rights,
liens mortgages or security interests of the Executive in any assets of the
Borrower or any of the Borrower's Subsidiaries. The Executive agrees that he
will not, and will not allow any other Person to amend, supplement, amend and
restate, renew, alter or otherwise modify the terms of any of the Indebtedness
or any of the Junior Dept Documents.
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3. LENDER PRIORITY. In the event of any distribution of
the assets or readjustment of the obligations and indebtedness of the
Borrower, whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action
or proceeding involving the readjustment of all or any of the Indebtedness
hereby subordinated, or the application of the assets of the Borrower to
the payment or liquidation thereof the Lender shall be entitled to receive
payment in full of any and all of the Liabilities then owing prior to the
payment of all or any part of the Indebtedness hereby subordinated and in
order to enable the Lender to enforce its rights hereunder in any such
action or proceeding the Lender is hereby irrevocably authorized and
empowered in its sole discretion to make and present for and on behalf of
the Executive such proofs of claims against the Borrower on account of the
Indebtedness hereby subordinated as the Lender may deem expedient or
proper and to vote such proofs of claims in any such proceeding and to
receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued
and to apply the same on account of any of the Liabilities.
4. GRANT OF AUTHORITY TO THE LENDER. In the event of any
distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all of any part of the
assets of the Borrower or the proceeds thereof to the creditors of the
Borrower, or upon the dissolution or other winding up of the Borrower's
business, or upon the sale of all or substantially all of the Borrower's
assets, then, and in any such event, any payment or distribution of any
kind or character, either in cash, securities or other property, which
shall be payable or deliverable upon or with respect to any or all of the
Indebtedness shall be paid or delivered directly to the Lender, for
application on any of the Liabilities, due or not due, until the
Liabilities shall have first been fully paid and satisfied. The Executive
irrevocably authorizes and empowers the Lender to demand, xxx for, collect
and receive every such payment or distribution and give acquittance
therefor in respect of payments thereof and to file claims and take such
other proceedings, in the Lender's own name or in the name of the
Executive or otherwise, as the Lender may deem necessary or advisable for
the enforcement of this Agreement; and the Executive will execute and
deliver to the Lender such powers of attorney, assignments or other
instruments or documents as may be requested by the Lender in order to
enable the Lender to enforce any and all claims upon or with respect to
any or all of the Indebtedness and to collect and receive any and all
payments or distributions which may be payable or deliverable at any time
upon or with respect to the Indebtedness, all for the benefit of the
Lender.
5. PAYMENTS RECEIVED BY THE EXECUTIVE. Should any payment
or distribution or security or instrument or proceeds thereof be received
by the Executive in contravention of this Agreement upon or with respect to
the Indebtedness or any other obligations of the Borrower to the Executive
prior to the satisfaction and the full payment of all of the Liabilities,
the Executive shall receive and hold the same in trust, as trustee,
for the benefit of the Lender and shall forthwith deliver the same to the
Lender in precisely the form received (except for the endorsement or
assignment of the Executive where necessary), for application on any of the
Liabilities, due or not due, and, until so delivered, the same shall
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be held in trust by the Executive as the property of the Lender. In the
event of the failure of the Executive to make any such endorsement or
assignment to the Lender, the Lender, or any of its officers or employees,
is hereby irrevocably authorized to make the same.
6. INSTRUMENT LEGEND. Any instrument evidencing any of the
Indebtedness (including, without limitation, the Junior Debt Documents), or
any portion thereof, will, on the date hereof or promptly hereafter, be
inscribed with a legend conspicuously indicating that payment thereof is
subordinated to the claims of the Lender pursuant to the terms of this
Agreement, and (i) a copy thereof with be delivered to the Lender
on the date hereof or promptly hereafter and (ii) upon request therefor by
the Lender, after the declaration of a default on the part of the
Borrower under any agreements between the Lender and the Borrower, the
original of any such instrument will be immediately delivered to the
Lender. Any instrument evidencing any of the Indebtedness, or any portion
thereof, which is hereafter executed by the Borrower, will, on the date
thereof, be inscribed with the aforesaid legend and a copy thereof will be
delivered to the Lender on the date of execution of promptly thereafter and
the original thereof will be delivered as and when described hereinabove.
7. SALARIES, REIMBURSEMENTS FOR EXPENSES AND BORROWINGS FROM
THE BORROWER, ASSIGNMENT OF CLAIMS; PAYMENTS AND COLLATERAL. Except for
director fees and expenses payable from time to time to the Executive as a
director of the Borrower in the aggregate amount not to exceed Forty-Five
Thousand Dollars ($45,000) amually and reimbursement, in accordance with
the terms of the Severance Agreement, for medical expenses incurred by the
Executive and/or payment of medical insurance premiums an behalf of the
Executive in an aggregate amount not to exceed Seventy-Five Thousand
Dollars ($75,000) annually, and except as otherwise permitted in any
written agreement between the Borrower and the Lender in connection with
the Lender's loans or extensions of credit or other financial
accommodations to the Borrower, the Executive agrees that until the
liabilities have been paid in full and satisfied, the Executive will not,
directly or indirectly, accept or receive the benefit of any salary,
remuneration or reimbursement for expenses from or on behalf of the
Borrower and will not assign or transfer to others any claim the Executive
has or may have against the Borrower, unless such assignment or transfer
is made expressly subject to this Agreement. By its execution of
Agreement, the Borrower agrees not to pay the Executive any sum on account
of any of the Indebtedness or to give the Executive any collateral as
security therefor at any time when payment thereof would be in breach of
any of the terms of this Agreement.
8. CONTINUING NATURE OF SUBORDINATION. This is a
continuing agreement of subordination and the Lender may continue, at any
time and without notice to the Executive, to extend credit or other
financial accommodation or benefit and loan monies to or for the account of
the Borrower on the faith hereof. Subject to the provisions of paragraph 20
below, this Agreement shall continue effective until the Liabilities shall
have been fully discharged.
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9. ADDITIONAL AGREEMENTS BETWEEN THE LENDER AND THE
BORROWER. The Lender, at any time and from time to time, may enter into
such agreement or agreements with the Borrower as the Lender may deem
proper, extending the time of payment of or renewing or otherwise altering
the terms of all or any of the Liabilities or affecting any security
underlying any or all of the Liabilities, or may exchange, sell, release,
surrender or otherwise deal with any such security, without in any
way impairing or affecting this Agreement thereby.
10. EXECUTIVE'S WAIVERS. The Executive expressly
waves all notice of the acceptance by the Lender of the subordination and
other provisions of this Agreement and all other notices whatsoever, and
the Executive expressly waives reliance by the Lender upon the
subordination and other agreements as herein provided. The Executive
agrees that the Lender has made no warranties or representations with
respect to the due execution, legality, validity, completeness or
enforceability, of the Note Purchase Agreement or the Notes, or the
collectibility of the Liabilities, that the Lender shall be entitled to
manage and supervise its loans to the Borrower in accordance with its usual
practices, modified from time to time as it deems appropriate under the
circumstances, without regard to the existence of any rights that the
Executive may now or hereafter have in or to any of the assets of the
Borrower, and that the Lender shall have no liability to the Executive for,
and the Executive waives any claim which the Executive may now have against
the Lender arising out of, (i) any and all actions which the Lender, in
good faith, takes or omits to take (including without limitation, actions
with respect to the creation, perfection or continuation of liens or
security interests in any collateral, actions with respect to the
occurrence of any Event of Default, actions with respect to the foreclosure
upon, sale or release of depreciation of or failure to realize upon, any
collateral for the Liabilities and actions with respect to the collection
of any claim for all or any part of the Liabilities from any account
debtor, guarantor or any other party) with respect to the Note Purchase
Agreement or any other agreement related thereto or to the collection of
the Liabilites or the valuation, use protection or release of any such
collateral, (ii) the Lender's election, in any proceeding instituted under
Chapter 11 of Title 11 of the United States Code (11 U.S.C Section 101 ET
SEQ.) (the "Bankruptcy Code"), of the application of Section 1111(b)(2) of
the Bankruptcy Code, and/or (iii) any borrowing or grant of a security
interest under Section 364 of the Bankruptcy Code.
11. BANKRUPTCY ISSUES. The Executive agrees that the
Lender may consent to use of cash collateral or provide financing to the
Borrower on such terms and conditions and in such amounts as the Lender, in
its sole discretion, may decide and that, in connection with such cash
collateral usage or such financing, the Borrower (or a trustee appointed
for the estate of the Borrower) may grant to the Lender liens and security
interests which (i) shall secure payment of the Liabilities (whether any
portion of the Liabilities arose prior to the filing of the petition for
relief or arises thereafter) and (ii) shall be superior in priority to the
liens and security interests, if any, held by the Executive on any assets of
the Borrower. All allocations of payments between the Lender and the
Executive shall, subject to any court order, continue to be made after the
filing of a petition under the Bankruptcy
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Code on the basis that the payments were to be allocated prior to
the date of such filing. The Executive agrees that he will not object to or
oppose a sale or other disposition of any assets securing any portion of the
Liabilities free and clear of security interests, liens or other claims
of the Executive under Section 363 of the Bankruptcy Code or any other
provision of the Bankruptcy Code if the Lender has consented to such sale
or disposition of assets. In the event that the Executive has or at any
time acquires any security for the Indebtedness, the Executive agrees not to
assert any right he may have to "adequate protection" of his interest in
such security in any bankruptcy proceeding and agrees that he will not seek
to have the automatic stay lifted with respect to such security, without
the prior written consent of the Lender. The Executive waives any claim he
may now or hereafter have arising out of the Lender's election, in any
proceeding instituted under Chapter 11 of the Bankruptcy Code, of the
application of Section 1111(b)(2) of the Bankruptcy Code, and/or any
borrowing or grant of a security interest under Section 364 of the
Bankruptcy Code by the Borrower, as debtor in possession. The Executive
agrees not to initiate or prosecute any claim, action or other proceeding
(i) challenging enforceability of the Lender's claim in respect of the
Liabilities, (ii) challenging the enforceability of any liens or security
interests in assets securing all or any part of the Liabilities, or (iii)
asserting any claim which the Borrower may hold with respect to the Lender.
To the extent that the Lender receives payments on, or proceeds of
collateral for, the Liabilities which are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of
such payment or proceeds received, the Liabilities, or part thereof
intended to be satisfied shall be revived and continue in full force and
effect as if such payments or proceeds had not been received by the Lender.
12. LENDER WAIVERS. No waiver shall be deemed to be made
by the Lender of any of its rights hereunder, unless the same shall be in
writing and consented to by the holder or holders of at least 66-2/3% of
the aggregate principal amount of the Notes at the time outstanding and
each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the Lender or the
obligations of the Executive to the Lender in any other respect at or any
other time.
13. INFORMATION CONCERNING FINANCIAL CONDITION OF THE
BORROWER. The Executive hereby assumes responsibility for keeping himself
informed of the financial condition of the Borrower, any and all endorsers
and any and all guarantors of the Liabilities and of all other
circumstances bearing upon the risk of nonpayment of the Liabilities
and/or the Indebtedness that diligent inquiry would reveal, and
the Executive hereby agrees that the Lender shall have no duty to advise
the Executive of information known to the Lender regarding such condition
or any such circumstances. In the event the Lender, in its sole
discretion, undertake at any time or from time to time, to provide any such
information to the Executive, the Lender shall be under no obligation to
undertake any investigation not a part of its regular business routine and
shall be under no obligation to disclose any information which, pursuant to
accepted or reasonable commercial finance
6
12
practice, the Lender wishes to maintain confidential. The Executive hereby
assents to any extension or postponement of the time of payment of the
Liabilities or to any other indulgence with respect thereto, to any
substitution, exchange or release of collateral which may at any time secure
the Liabilities and/or to the addition or release of any other party or
person primarily or secondarily liable therefor.
14. APPLICATION OF PAYMENTS. The Executive hereby
agrees that all payments received by the Lender may be applied and
reapplied, in whole or in part, to any, of the Liabilities, as the Lender,
in its sole discretion, deems appropriate.
15. WAIVER OF PERSONAL SERVICE. THE EXECUTIVE WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON HIM, AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE
EXECUTIVE AT THE ADDRESS STATED HEREIN, AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED THREE (3) DAYS AFTER THE SAME SHALL HAVE BEEN
POSTED AS AFORESAID, AND THE EXECUTIVE WAIVES ANY OBJECTION TO VENUE OF
ANY ACTIONS INSTITUTED HEREUNDER
16. GOVERNING LAW. This Agreement has been delivered and
accepted at and shall be deemed to have been made at Cleveland, Ohio, and
shall be interpreted, and the rights and liabilities of the parties hereto
determined in accordance with the laws and decisions of the State of Ohio.
This Agreement shall be binding upon and inure to the benefit of the
Executive, the Lender and their respective heirs, devisees, trustees,
legatees, estates, executors, administrators, successors and assigns.
17. SECTION TITLES. The section titles contained in this
Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the ageement between the parties
hereto.
18. RELEASE. Effective as of the date of the execution
and delivery of this Agreement, the Lender agrees to release and discharge,
and hereby does release and discharge, the Executive of and from all
damages, losses, claims, demands, liabilities, obligations, actions and
causes of action whatsoever that the Lender has or claims to have
against the Executive, in his capacity as officer, director or stockholder
of the Borrower or in any other capacity, as of such date and whether known
or unknown at the time of this release, and of every nature and extent
whatsoever on account of or in any way, directly or indirectly, touching,
concerning, arising out of or founded upon (a) the Note Purchase
Agreement or any other lending relationship of the Lender with the Borrower,
and any default or event of default thereunder, (b) the business,
operations, properties and condition, financial or otherwise, of the
Borrower, or (c) any action, omission, representation or warranry of the
Executive in any such capacity in connection with any of the foregoing.
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13
19. CERTAIN ACTIONS. The Executive agrees that if the Lender
hereafter institutes or join in any action or proceeding against any third
party with respect to any matter of the types referred to in the preceding
paragraph 18, and if the Executive becomes subject to legal process in
connection with such action or proceeding, the Executive will timely comply
with such legal process.
20. TERMINATION OF AGREEMENT. Notwithstanding any other provision
herein, this Agreement and the subordination evidenced hereby shall terminate
and be of no further force and effect if and when the borrower (including any
successor or assign of the Borrower) shall have delivered to the Lender,
pursuant to Section 5A of the Note Purchase Agreement, financial statements
showing the Consolidated Net Worth (as defined in the Note Purchase Agreement)
of the Borrower (including any successor or assign of the Borrower) to be not
less than Seventy-Five Millon Dollars ($75,000,000).
21. AUTHORITY. The Executive hereby certifies that he has the
legal capacity and all necessary authority to grant the subordination evidenced
hereby and to execute this Agreement. The Lender hereby certifies that it has
all necssary authority to execute this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the_________day of__________________, 1995.
___________________________________
Xxxxxx X. Xxxxxxx
OLYMPUS PRIVATE PLACEMENT FUND, LP.
By:________________________________
Title:_____________________________
8
14
The Borrower hereby accepts and acknowledges receipt of a copy of the
foregoing Severance Payment Subordination Agreement and agrees that it will not
pay any of the Indebtedness (as defined in the foregoing Agreement) owing by it
to Xxxxxx X. Xxxxxxx except as the foregoing Agreement provides. In the event
of a breach by the Borrower of any of the provisions herein or of the foregoing
Agreement, all of the Liabilities (as defined in the foregoing Agreement) may,
without presentment, demand, protest or notice of any kind, become immediately
due and payable.
LDI CORPORATION
By:
-------------------------------
Title:
-----------------------------
15
EXHIBIT C
---------
SEVERANCE PAYMENT SUBORDINATION AGREEMENT
This Severance Payment Subordination Agreement (this "Agreement") is
entered into between XXXXXX X. CUTTER, whose address is 00000 Xxxxxx Xxxxx,
Xxxxx Xxxxx, Xxxx 00000 (the "Executive"), and OLYMPUS PRIVATE PLACEMENT FUND,
L.P., a Delaware limited partnership having its principal office at Metro
Center, Xxx Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 (the "Lender," which
term as used herein shall include any holder or holders from time to time of
the Notes (as hereinafter defined)).
WITNESSETH:
WHEREAS, the Executive is a director and stockholder of LDI
Corporation, a Delaware corporation (the "Borrower"), and is financially
interested in the Borrower in that the Borrower is now and may hereafter be
indebted or otherwise obligated to the Executive, both for director fees and
pursuant to the terms of that certain Revised Compensation Plan and Severance
Agreement between the Borrower and the Executive, dated as of April 21, 1994,
as amended by an amendment dated as of July 21, 1995 (the "Severance Agreement")
(the Severance Agreement and all other agreements, instruments or other
documents now or, with the prior consent of the Lender, hereafter executed in
connection therewith being collectively referred to herein as the "Junior Debt
Documents");
WHEREAS, the Borrower is presently indebted to the Lender as a result
of the advance of monies and other extensions of credit and financial
accommodations provided by the Lender pursuant to that certain Note Purchase
Agreement dated July 2, 1991 (as the same may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, the "Note
Purchase Agreement") (all capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed to such terms in the Note
Purchase Agreement), and the Borrower is not in compliance with certain
financial covenants in the Note Purchase Agreement
WHEREAS, the Lender has agreed to amend the Note Purchase Agreement so
that the Borrower is not in violation thereof, on certain conditions, including
the condition that the Executive execute and deliver this Agreement; and
WHEREAS, the Executive acknowledges that the loan or advance of monies
or other extension of any financial accommodation or credit to the Borrower by
the Lender and such amendment of the Note Purchase Agreement are of value to
the Executive;
NOW THEREFORE, for good and valuable consideration, receipt of which is
hereby acknowledged by the Executive, and in order to induce the Lender to
amend the Note Purchase Agreement, the Executive and the Lender hereby agree as
follows:
1. STANDBY; SUBORDINATION; SUBROGATION. The Executive will not ask,
demand, xxx for, take or receive from the Borrower (or from any guarantor with
respect to the Borrower), by setoff or in any other manner, the whole or any
part of any monies which may now or hereafter be owing by the Borrower
(including but not limited to, any dividends in
16
respect of any capital stock of the Borrower which is owned either directly or
beneficially by the Executive, except as otherwise permitted under the Note
Purchase Agreement), or any successor or assign of the Borrower, including,
without limitation, a receiver, custodian, trastee or debtor in possession (the
term "Borrower" hereinafter shall include any such successor or assign of the
Borrower) to the Executive or be owing by any other person, firm partnership or
corporation to the Executive for the benefit of the Borrower (whether such
amounts represent principal or interest, or obligations which are due or not
due, direct or indirect, absolute or contingent), including, without
limitation, the taking of any negotiable instruments evidencing such amounts
(all such indebtedness, obligations and liabilities being hereinafter referred
to as the "Indebtedness"), nor any security for any of the foregoing, unless
and until all Liabilities (as defined below) shall have been fully paid and
satisfied. As used herein, the term "liabilities" means all obligations,
liabilities and indebtedness (including, but not limited to, all principal,
premiums (if any), interest, penalties, fees, expenses and charges), whether
absolute or contingent, payable directly or indirectly by the Borrower, owing
to the Lender, whether outstanding on the date of this Agreement or hereafter
created, incurred or assumed by the Borrower under the terms of the Note
Purchase Agreement and the Notes (as defined in the Note Purchase Agreement),
including any renewals, extensions, refundings, deferrals, replacements,
restructuring, amendments, modifications and refinancing of the above defined
Liabilities. All rights, liens and security interests of the Executive,
whether now or hereafter arising and however existing, in any assets of the
Borrower or any assets securing the Liabilities shall be and hereby are
subordinated to the rights and interests of the Lender, in those assets, and
the Executive shall have no right to possession of any such assets or to
foreclose upon any such assets, whether by judicial action or otherwise, unless
and until all of the Liabilities shall have been fully paid and satisfied. The
Executive also hereby agrees that, regardless of whether the Liabilities are
secured or unsecured, the Lender shall be subrogated for the Executive with
respect to the Executive's claims against the Borrower for the Indebtedess and
the Executive's rights, liens and security interest, if any, in any of the
Borrower's assets and the proceeds thereof until all of the Liabilities shall
have been fully paid and satisfied. The Executive acknowledges and agrees that,
to the extent the terms and provisions of the Note Purchase Agreement and this
Agreement are inconsistent with the terms and provisions of any of the Junior
Debt Documents, the terms and provisions of the Junior Debt Documents shall be
deemed to have been superseded.
2. INDEBTEDNESS OWED ONLY TO THE EXECUTVE. The Executive warrants and
represents that the Executive has not previously assigned interest in the
Indebtedness, that no other party owns an interest in the Indebtedness other
than the Executive (whether as joint holders of the Indebtedness, participants
or otherwise) and that the entire Indebtedness is and shall continue to be
owing only to the Executive. The Executive further warrants and represents
that the Indebtedness is not and shall not be secured by any rights, liens,
mortgages or security interests of the Executive in any assets of the Borrower
or any of the Borrower's Subsidiaries. The Executive agrees that he will not,
and will not allow any other Person to amend, supplement, amend and restate,
renew, alter or otherwise modify the terms of any of the Indebtedness or any of
the Junior Debt Documents.
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17
3. LENDER PRIORITY. In the event of any distribution of the assets or
readjustment of the obligations and indebtedness of the Borrower, whether by
reason of liquidation, bankruptcy, arrangement, receivership, assigmment for
the benefit of creditors or any other action or proceeding involving the
readjustment of all or any of the Indebtedness hereby subordinated, or the
application of the assets of the Borrower to the payment or liquidation
thereof, the Lender shall be entitled to receive payment in full of any and all
of the Liabilities then owing prior to the payment of all or any part of the
Indebtedness hereby subordinated, and in order to enable the Lender to enforce
its rights hereunder in any such action or proceeding, the Lender is hereby
irrevocably authorized and empowered in its sole discretion to make and present
for and on behalf of the Executive such proofs of claims against the Borrower
on account of the Indebtedness hereby subordinated as the Lender may deem
expedient or proper and to vote such proofs of claims in any such proceeding
and to receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
to apply the same on account of any of the Liabilities.
4. GRANT OF AUTHORITY TO THE LENDER. In the event of any distribution,
division or application, partial or complete, voluntary or involuntary, by
operation of law or otherwise, of all of any part of the assets of the Borrower
or the proceeds thereof to the creditors of the Borrower, or upon the
dissolution or other winding up of the Borrower's business, or upon the sale of
all or substantially all of the Borrower's assets, then, and in any such event,
any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or
with respect to any or all of the Indebtedness shall be paid or delivered
directly to the Lender, for application on any of the Liabilities, due or not
due, until the Liabilities shall have first been fully paid and satisfied. The
Executive irrevocably authorizes and empowers the Lender to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor in respect of payments thereof and to file claims and take such other
proceedings, in the Lender's own name or in the name of the Executive or
otherwise, as the Lender may deem necessary or advisable for the enforcement of
this Agreement; and the Executive will execute and deliver to the Lender such
powers of attorney, assignments or other instruments or documents as may be
requested by the Lender in order to enable the Lender to enforce any and all
claims upon or with respect to any or all of the Indebtedness and to collect
and receive any and all payments or distributions which may be payable or
deliverable at any time upon or with respect to the Indebtedness, all for the
benefit of the Lender.
5. PAYMENTS RECEIVED BY THE EXECUTIVE. Should any payment or
distribution or security or instrument or proceeds thereof be received by the
Executive in contravention of this Agreement upon or with respect to the
Indebtedness or any other obligations of the Borrower to the Executive prior to
the satisfaction and the full payment of all of the Liabilities, the Executive
shall receive and hold the same in trust, as trustee, for the benefit of the
Lender and shall forthwith deliver the same to the Lender in precisely the form
received (except for the endorsement or assignment of the Executive where
necessary), for application on any of the Liabilities, due or not due, and,
until so delivered, the same shall
3
18
be held in trust by the Executive as the property of the Lender. In the event
of the failure of the Executive to make any such endorsement or assignment to
the Lender, the Lender, or any of its officers or employees, is hereby
irrevocably authorized to make the same.
6. INSTRUMENT LEGEND. Any instrument evidencing any of the Indebtedness
(including, without limitation, the Junior Debt Documents), or any portion
thereof will, on the date hereof or promptly hereafter, be inscribed with a
legend conspicuously indicating that payment thereof is subordinated to the
claims of the Lender pursuant to the terms of this Agreement, and (i) a copy
thereof will be delivered to the Lender on the date hereof or promptly
hereafter and (ii) upon request therefor by the Lender, after the declaration
of a default on the part of the Borrower under any ageements between the Lender
and the Borrower, the original of any such instrument will be immediately
delivered to the Lender. Any instrument evidencing any of the Indebtedness, or
any portion thereof, which is hereafter executed by the Borrower, will, on the
date thereof, be inscribed with the aforesaid legend and a copy thereof will
be delivered to the Lender on the date of execution or promptly thereafter and
the original thereof will be delivered as and when described hereinabove.
7. SALARIES, REIMBURSEMENTS FOR EXPENSES AND BORROWINGS FROM THE
BORROWER; ASSIGNMENT OF CLAIMS; PAYMENTS AND COLLATERAL. Except for director
fees and expenses payable from time to time to the Executive as a director of
the Borrower in the aggregate amount not to exceed Twenty-Three Thousand
Dollars ($23,000) annually and reimbursement, in accordance with the terms of
the Severance Agreement, for medical expenses incurred by the Executive and/or
payment of medical insurance premiums on behalf of the Executive in an
aggregate amount not to exceed Seventy-Five Thousand Dollars ($75,000)
annually, and except as otherwise permitted in any written agreement between
the Borrower and the Lender in connection with the Lender's loans or extensions
of credit or other financial accommodations to the Borrower, the Executive
agrees that until the Liabilities have been paid in full and satisfied, the
Executive will not, directly or indirectly, accept or receive the benefit of
any salary, remuneration or reimbursement for expenses from or on behalf of the
Borrower and will not assign or transfer to others any claim the Executive has
or may have against the Borrower, unless such assignment or transfer is made
expressly subject to this Agreement. By its execution of this Agreement, the
Borrower agrees not to pay the Executive any sum on account of any of the
Indebtedness or to give the Executive any collateral as security therefor at
any time when payment thereof would be in breach of any of the terms of this
Agreement
8. CONTINUING NATURE OF SUBORDINATION. This is a continuing
agreement of subordination, and the Lender may continue, at any time and
without notice to the Executive, to extend credit or other financial
accommodation or benefit and loan monies to or for the account of the Borrower
on the faith hereof. Subject to the provisions of paragraph 20 below, this
Ageement shall continue effective until the liabilities shall have been fully
discharged.
4
19
9. ADDITIONAL AGREEMENTS BETWEEN THE LENDER AND THE BORROWER. The
Lender, at any time and from time to time, may enter into such agreement or
agreements with the Borrower as the Lender may deem proper, extending the time
of payment of or renewing or otherwise altering the terms of all or any of the
Liabilities or affecting any security underlying any or all of the Liabilities,
or may exchange, sell, release, surrender or otherwise deal with any such
security, without in any way impairing or affecting this Agreement thereby.
10. EXECUTIVE'S WAIVERS. The Executive expressly waives all notice
of the acceptance by the Lender of the subordination and other provisions of
this Agreement and all other notices whatsoever, and the Executive expressly
waives reliance by the Lender upon the subordination and other agreements as
herein provided. The Executive agrees that the Lender has made no warranties
or representations with respect to the due execution, legality, validity,
completeness or enforceability of the Note Purchase Ageement or the Notes, or
the collectibility of the Liabilities, that the Lender shall be entitled to
manage and supervise its loans to the Borrower in accordance with its usual
practices, modified from time to time as it deems appropriate under the
circumstances, without regard to the existence of any rights that the Executive
may now or hereafter have in or to any of the assets of the Borrower, and that
the Lender shall have no liability to the Executive for, and the Executive
waives any claim which the Executive may now have against the Lender arisng out
of, (i) any and all actions which the Lender, in good faith, takes or omits to
take (including, without limitation, actions with respect to the creation,
perfection or continuation of liens or security interests in any collateral,
actions with respect to the occurrence of any Event of Default, actions with
respect to the foreclosure upon, sale or release of, depreciation of or failure
to realize upon, any collateral for the Liabilities and actions with respect to
the collection of any claim for all or any part of the Liabilities from any
account, debtor, guarantor or any other party) with respect to the Note
Purchase Agreement or any other agreement related thereto or to the collection
of the Liabilities or the valuation, use, protection or release of any such
collateral, (ii) the Lenders election, in any proceeding instituted under
Chapter 11 of Title 11 of the United States Code (11 U.S.C. Section 101 ET
SEQ.) (the "Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code, and/or (iii) any borrowing or grant of a security interest
under Section 364 of the Bankruptcy Code.
11. BANKRUPTCY ISSUES. The Executive agrees that the Lender may
consent to use of cash collateral or provide financing to the Borrower on such
terms and conditions and in such amounts as the Lender, in its sole discretion,
may decide and that, in connection with such cash collateral usage or such
financing, the Borrower (or a trustee appointed for the estate of the Borrower)
may grant to the Lender liens and security interests which (i) shall secure
payment of the Liabilities (whether any portion of the Liabilities arose prior
to the filing of the petition for relief or arises thereafter) and (ii) shall
be superior in priority to the liens and security interests, if any, held by
the Executive on any assets of the Borrower. All allocations of payments between
the Lender and the Executive are subject to any court order, continue to be
made after the filing of a petition under the Bankruptcy
5
20
Code on the same basis that the payments were to be allocated prior to the date
of such filing. The Executive agrees that he will not object to or oppose a
sale or other disposition of any assets securing any portion of the
Liabilities free and clear of security interests, liens or other claims of the
Executive under Section 363 of the Bankruptcy Code or any other provision of
the Bankruptcy Code if the Lender has consented to such sale or disposition of
assets. In the event that the Executive has or at any time acquires any
security for the Indebtedness, the Executive agrees not to assert any right he
may have to "adequate protection" of his interest in such security in any
bankruptcy proceeding and agrees that he will not seek to have the automatic
stay lifted with respect to such security, without the prior written consent
of the Lender. The Executive waives any claim he may now or hereafter have
arising out of the Lender's election, in any proceeding instituted under
Chapter 11 of the Bankruptcy Code, of the application of Section 1111(b)(2) of
the Bankruptcy Code, and/or any borrowing or grant of a security interest
under Section 364 of the Bankruptcy Code by the Borrower, as debtor in
possession. The Executive agrees not to initiate or prosecute any claim,
action or other proceeding (i) challenging the enforceability of the Lender's
claim in respect of the Liabilities, (ii) challenging the enforceability of
any liens or security interests in assets securing all or any part of the
Liabilities, or (iii) asserting any claim which the Borrower may hold with
respect to the Lender. To the extent that the Lender receives payments on, or
proceeds of collateral for, the Liabilities which are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then, to the extent of
such payment or proceeds received, the Liabilities, or part thereof intended to
be satisfied shall be revived and continue in full force and effect as if such
payments or proceeds had not been received by the Lender.
12. LENDER WAIVERS. No waiver shall be deemed to be made by the
Lender of any of its rights hereunder, unless the same shall be in writing
and consented to by the holder or holders of at least 66-2/3% of the
aggregate principal amount of the Notes at the time outstanding, and each
waiver, if any, shall be a waiver only with respect to the specific instance
involved and shall in no way impair the rights of the Lender or the obligations
of the Executive to the Lender in any other respect at or any other time.
13. INFORMATION CONCERNING FINANCIAL CONDITION OF THE BORROWER. The
Executive hereby assumes resposibility for keeping himself informed of the
financial condition of the Borrower, any and all endorsers and any and all
guarantors of the Liabilities and of all other circumstances bearing upon the
risk of nonpayment of the Liabilities and/or the Indebtedness that diligent
inquiry would reveal, and the Executive hereby agrees that the Lender shall
have no duty to advise the Executive of information known to the Lender
regarding such condition or any such circumstances. In the event the Lender,
in its sole discretion, undertakes, at any time or from time to time, to
provide any such information to the Executive, the Lender shall be under no
obligation to undertake any investigation not a part of its regular business
routine and shall be under no obligation to disclose any information which,
pursuant to accepted or reasonable commercial finance
6
21
practice, the Lender wishes to maintain confidential. The Executive hereby
assents to any extension or postponement of the time of payment of the
Liabilities or to any other indulgence with respect thereto, to any
substitution, exchange or release of collateral which may at any time secure
the Liabilities and/or to the addition or release of any other party or person
primarily or secondarily liable therefor.
14. APPLICATION OF PAYMENTS. The Executive hereby agrees that all
payments received by the Lender may be applied and reapplied, in whole or in
part, to any of the Liabilities, as the Lender, in its sole discretion, deems
appropriate.
15. WAIVER OF PERSONAL SERVICE. THE EXECUTIVE WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON HIM, AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE EXECUTIVE AT THE ADDRESS
STATED HEREIN, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED THREE (3)
DAYS AFTER THE SAME SHALL HAVE BEEN POSTED AS AFORESAID, AND THE EXECUTIVE
WAIVES ANY OBJECTION TO VENUE OF ANY ACTIONS INSTITUTED HEREUNDER.
16. GOVERNING LAW. This Agreement has been delivered and accepted
at and shall be deemed to have been made at Cleveland, Ohio, and shall be
interpreted, and the rights and liablities of the parties hereto determined in
accordance with the laws and decisions of the State of Ohio. This Agreement
shall be binding upon and inure to the benefit of the Executive, the Lender
and their respective heirs, devisees, trustees, legatees, estates, executors,
administrators, successors and assigns.
17. SECTION TITLES. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
18. RELEASE. Effective as of the date of the execution and delivery
of this Agreement, the Lender agrees to release and discharge, and hereby does
release and discharge, the Executive of and from all damages, losses, claims,
demands, liabilities, obligations, actions and causes of action whatsoever
that the Lender has or claims to have against the Executive, in his capacity
as officer, director or stockholder of the Borrower or in any other capacity,
as of such date and whether known or unknown at the time of this release, and
of every nature and extent whatsoever on account of or in any way, directly or
indirectly, touching, concerning, arising out of or founded upon (a) the Note
Puchase Agreement or any other lending relationship of the Lender with the
Borrower, and any default or event of default thereunder, (b) the business,
operations, properties and condition, financial or otherwise, of the Borrower,
or (c) any action, omission, representation or warranty of the Executive in any
such capacity in connection with any of the foregoing.
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22
19. CERTAIN ACTIONS. The Executive agrees that if the Lender
hereafter institutes or joins in any action or proceeding against any third
party with respect to any matter of the types referred to in the preceding
paragraph 18, and if the Executive becomes subject to legal process in
connection with such action or proceeding, the Executive will timely comply
with such legal process.
20. TERMINATION OF AGREEMENT. Notwithstanding any other provision
herein, this Ageement and the subordination evidenced hereby shall terminate and
be of no further force and effect if and when the Borrower (including any
successor or assign of the Borrower) shall have delivered to the Lender,
pursuant to Section 5A of the Note Purchase Agreement, financial statements
showing the Consolidated Net Worth (as defined in the Note Purchase Agreement)
of the Borrower (including any successor or assign of the Borrower) to be not
less than Seventy-Five Million Dollars ($75,000,000).
21. AUTHORITY. The Executive hereby certifies that he has the legal
capacity and all necessary authority to grant the subordination evidenced
hereby and to execute this Agreement. The Lender hereby certifies that it has
all necessary authority to execute this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the _________ day of________________, 1995.
______________________________
Xxxxxx X. Cutter
OLYMPUS PRIVATE PLACEMENT FUND, L.P.
By:___________________________
Title:________________________
8
23
The Borrower hereby accepts and acknowledges receipt of a copy of the
foregoing Severance Payment Subordination Agreement and agrees that it will not
pay any of the Indebtedness (as defined in the foregoing Agreement) owing by it
to Xxxxxx X. Cutter except as the foregoing Agreement provides. In the event of
a breach by the Borrower of any of the provisions herein or of the foregoing
Agreement, all of the Liabilities (as defined in the foregoing Agreement) may,
without presentment, demand, protest or notice of any kind, become immediately
due and payable.
LDI CORPORATION
By:
------------------------------
Title:
--------------------------
9
24
EXHIBIT D
---------
AMENDED AND RESTATED WARRANT CERTIFICATE
The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended, and neither the securities nor any
interest therein may be sold, transferred, pledged or otherwise disposed of in
the absence of such registration or an exemption under such Act and the rules
and regulations thereunder. The transfer of such securities is subject to the
restrictions set forth in Article XI of that certain Note Purchase Agreement,
dated July 2, 1991 between LDI Corporation and Olympus Private Placement Fund,
L.P., copies of which are available for inspection at the offices of LDI
Corporation, and such securities may be transferred only in compliance with the
terms and conditions of said Article XI of said Note Purchase Agreement.
Void after 5:00 P.M. Warrants to Purchase
August 15, 1998 1,574,803 Shares of Common Stock
Dated: October 18, 1995
AMENDED AND RESTATED
--------------------
WARRANT CERTIFICATE REPRESENTING
--------------------------------
WARRANTS TO PURCHASE COMMON STOCK OF
------------------------------------
LDI CORPORATION
---------------
LDI Corporation, a Delaware corporation (the "Company"), hereby certifies that,
for value received, Olympus Private Placement Fund, L.P., the holder of these
Warrants (the "Warrants," and each right to purchase a share of Common Stock, a
"Warrant") is entitled, subject to the terms set forth below, at any time, or
from time to time, to purchase from the Company 1,574,803 fully paid and
nonassessable shares of Common Stock of the Company. These Warrants and all
rights hereunder, to the extent such rights shall not have been exercised,
shall terminate and become null and void at 5:00 p.m., New York time, on August
15, 1998. For purposes of these Warrants, the term "Common Stock" shall
henceforth have the meaning set forth in the Note Purchase Agreement dated July
2, 1991 between the Company and Olympus Private Placement Fund, L.P. (as
amended from time to time, including without limitation by certain letter
agreements by and between said parties dated April 29, 1994, April 27, 1995,
September 21, 1995 and the date hereof, the "Note Agreement").
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This Amended and Restated Warrant Certificate is issued in substitution
of and exchange for two (2) Warrant Certificates, the first of which represents
45,496 Warrants issued in conjunction with the issuance of the Company's 9.375%
Subordinated Notes due August 15, 2000 (now known as the Company's 12-3/4%
Subordinated Notes due August 15, 2000"), and the second of which represents
1,529,307 additional Warrants issued May 2, 1994 in connection with a
modification of said Subordinated Notes.
These Warrants shall be subject to the terms set forth in the Note
Agreement and to the following terms and conditions:
SECTION 1. EXERCISE OF WARRANT; EXERCISE PRICE; ADJUSTMENTS
------------------------------------------------
RELATIVE TO EXERCISE OF WARRANT.
-------------------------------
1A. EXERCISE OF WARRANTS. (a) Subject to the conditions set forth in
this Section 1, the holder of any Warrant may, at such holder's option,
exercise such holder's rights under all or any part of the Warrants to purchase
Common Stock (the "Warrant Shares") at a price of $5.00 per share (the
"Exercise Price") at any time and from time to time prior to and including 5:00
p.m. on August 15, 1998. The Warrant Shares and the Exercise Price are subject
to certain adjustments as set forth in this Section 1, and the terms "Warrant
Shares" and "Exercise Price" as used herein shall as of any time be deemed to
include all such adjustments to be given effect as of such time in accordance
with the terms hereof.
1B. ADJUSTMENT OF EXERCISE PRICE UPON ISSUANCE OF COMMON STOCK. If and
whenever after the date hereof the Company shall issue or sell any shares of
its Common Stock (except upon the exercise of the Warrants) for a consideration
per share less than the Exercise Price in effect immediately prior to the time
of such issue or sale, then, forthwith upon such issue or sale, the Exercise
Price with respect to the exercise of any Warrant subsequent to such event
shall be reduced (but not increased, except as otherwise specifically provided
in paragraph 1B (3) ) to the price determined by dividing (1) an amount equal
to the sum of (A) the aggregate number of shares of Common Stock outstanding
immediately prior to such issue or sale multiplied by the then existing
Exercise Price, and (B) the consideration, if any, received by the Company upon
such issue or sale, by (ii) the aggregate number of shares of Common Stock of
all classes outstanding immediately after such issue or sale, all calculated to
the nearest cent. No adjustment of the Exercise Price, however, shall be made
in an amount less than 1% of the Exercise Price, but any such lesser adjustment
shall be carried forward and shall be made
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at the time of and together with the next subsequent adjustment.
For the purposes of this paragraph 1B, the following paragraphs 1B(1)
through 1B(8) shall also be applicable:
1B(1). ISSUANCE OF RIGHTS OR OPTIONS - In case at any time after the
date hereof the Company shall in any manner grant (whether directly or by
assumption in a merger or otherwise, except in the circumstances described in
xxxxxxxxx 0X xxxxx) any rights to subscribe for or to purchase, or any options
for the purchase of, Common Stock or any stock or securities convertible into
or exchangeable for Common Stock (such convertible or exchangeable stock or
securities being herein called "Convertible Securities"), whether or not such
rights or options or the right to convert or exchange any such Convertible
Securities are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such rights or options or upon
conversion or exchange of such Convertible Securities (determined by dividing
(i) the total amount, if any, received or receivable by the Company as
consideration for the granting of such rights or options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the exercise of such rights or options, plus, in the case of such rights
or options which relate to Convertible Securities, the minimum aggregate amount
of additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by (ii) the
total maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such rights or options)
shall be less than the Exercise Price in effect immediately prior to the time
of the granting of such rights or options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such rights or options or
upon conversion or exchange of all such Convertible Securities issuable upon
the exercise of such rights or options shall (as of the date of granting of
such rights or options) be deemed to be outstanding and to have been issued for
such price per share. Except as provided in paragraph IB(3), no further
adjustment of the Exercise Price shall be made upon the actual issue of such
Common Stock or of such Convertible Securities upon exercise of such rights or
options or upon the actual issue of such Common Stock upon conversion or
exchange of such Convertible Securities.
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1B(2). ISSUANCE OF CONVERTIBLE SECURITIES - In case at any time after
the date hereof the Company shall in any manner issue (whether directly or by
assumption in a merger or otherwise) or sell any Convertible Securities,
whether or not the rights to exchange or convert thereunder are immediately
exercisable, and the price per share for which Common Stock is issuable upon
such conversion or exchange (determined by dividing (i) the total amount
received or receivable by the Company as consideration for the issue or sale of
such Convertible Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of all such Convertible Securities) shall be
less than the Exercise price in effect immediately prior to the time of such
issue or sale, then the total maximum number of shares of Common Stock issuable
upon conversion or exchange of all such Convertible Securities shall (as of the
date of the issue or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued for such price per share; PROVIDED,
HOWEVER, that (a) except as otherwise provided in paragraph IB(3), no further
adjustment of the Exercise Price shall be made upon the actual issue of such
Common Stock upon conversion or exchange of such Convertible Securities, and
(b) if any such issue or sale of such Convertible Securities is made upon
exercise of any rights to subscribe for or to purchase or any option to
purchase any such Convertible Securities for which adjustments of the Exercise
Price have been or are to be made pursuant to other provisions of this
paragraph IB, no further adjustment of the Exercise Price shall be made by
reason of such issue or sale.
1B(3). CHANGE IN OPTION PRICE OR CONVERSION RATE - Upon the happening
of any of the following events, namely, if the purchase price provided for in
any right or option referred to in paragraph 1B(1), the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in paragraph 1B(1) or 1B(2), or the rate at
which any Convertible Securities referred to in paragraph 1B(1) or 1B(2) are
convertible into or exchangeable for Common Stock shall change (other than
under or by reason of provisions designed to protect against dilution), the
Exercise Price then in effect hereunder shall forthwith be readjusted
(increased or decreased, as the case may be) to the Exercise Price which would
have been in effect at such time had such rights, options or Convertible
Securities still
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outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time initially
granted, issued or sold. On the expiration of any such option or right
referred to in paragraph 1B(1) or the termination of any such right to
convert or exchange any such Convertible Securities referred to in paragraph
1B(1) or 1B(2), the Exercise Price then in effect hereunder shall forthwith be
readjusted (increased or decreased, as the case may be) to the Exercise Price
which would have been in effect at the time of such expiration or termination
had such right, option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been granted, issued
or sold, and the Common Stock issuable thereunder shall no longer be deemed to
be outstanding. If the purchase price provided for in any such right or option
referred to in paragraph 1B(1) or the rate at which any Convertible Securities
referred to in paragraph 1B(1) or 1B(2) are convertible into or exchangeable
for Common Stock shall be reduced at any time under or by reason of provisions
with respect thereto designed to protect against dilution, then in case of the
delivery of shares of Common Stock upon the exercise of any such right or
option or upon conversion or exchange of any such Convertible Securities, the
Exercise Price then in effect hereunder shall, if not already adjusted,
forthwith be adjusted to such amount as would have obtained had such right,
option or Convertible Securities never been issued as to such shares of Common
Stock and had adjustments been made upon the issuance of the shares of Common
Stock delivered as aforesaid, but only if as a result of such adjustment the
Exercise Price then in effect hereunder is thereby reduced.
1B (4) STOCK DIVIDENDS - In case at any time the Company shall
declare a dividend or make any other distribution upon or by reference to
ownership of any class or series of stock of the Company payable in shares of
Common Stock, Convertible Securities or capital stock of a corporation other
than the Company, any shares of Common Stock, Convertible Securities or such
shares of a corporation other than the Company, as the case may be, issuable in
payment of such dividend or distribution shall he deemed to have been issued or
sold without consideration.
1B(5). CONSIDERATION FOR STOCK - In case at any time any shares of
Common Stock or Convertible securities or any rights or options to purchase any
such Common Stock or Convertible Securities shall be issued or sold for cash,
the consideration received
5
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therefor shall be deemed to be the amount paid by the purchaser therefor,
without deduction therefrom of any expenses incurred or any underwriting
discounts and commissions or concessions paid or allowed by the Company in
connection therewith. In case at any time any shares of Common Stock of any
class or Convertible Securities or any rights or options to purchase any such
shares of Common Stock or Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such
consideration as determined reasonably and in good faith by the Board of
Directors of the Company, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the Company in
connection therewith. In case at any time any shares of Common Stock of any
class or Convertible Securities or any rights or options to purchase such
shares of Common Stock or Convertible Securities shall be issued in connection
with any merger or consolidation in which the Company is the surviving
corporation, the amount of consideration received therefor shall be deemed to
be the fair value as determined reasonably and in good faith by the Board of
Directors of the Company of such portion of the assets and business of the
nonsurviving corporation as such Board may determine to be attributable to such
shares of Common Stock, Convertible Securities, rights or options, as the case
may be. In case at any time any rights or options to purchase any shares of
Common Stock or Convertible Securities shall be issued in connection with the
issue and sale of other securities of the Company, together comprising one
integral transaction in which no consideration is allocated to such rights or
options by the parties thereto, such rights or options shall be deemed to have
been issued for an amount of consideration equal to the fair value thereof as
determined reasonably and in good faith by the Board of Directors of the
Company.
1B(6). RECORD DATE - In case the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in shares of Common Stock or in
Convertible Securities, or (ii) to subscribe for or purchase shares of Common
Stock or Convertible Securities, then such record date shall be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been
issued or sold as a result of the declaration of such dividend or the making of
such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be,
6
30
unless such dividend or other distribution or right to subscribe when exercised
is to be measured by the market price in effect on the date such dividend or
other distribution or right to subscribe is exercised, in which case such date
shall be deemed to be the date of the issue or sale of the shares of Common
Stock deemed to have been so issued or sold.
1B (7). TREASURY SHARES - The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock for the purposes of this paragraph
1B.
1B (8) CERTAIN ISSUES EXCEPTED - Anything to the contrary herein
notwithstanding, the Company shall not be required to make any adjustment of
the Exercise Price in respect of (i) any issuance of Common Stock to officers,
directors or employees pursuant to employee stock option, benefit or incentive
plans established for their benefit and in existence on the date hereof or (ii)
any issuance of no more than 5% of the Common Stock issued and outstanding on
the date hereof, as such number may be adjusted for events described in
paragraph ID hereof, to officers, directors or employees pursuant to employee
stock option, benefit or incentive plans established for their benefit and
approved by the Board of Directors of the Company after the date hereof, or in
each case described in clause (i) or (ii) above, in respect of any issuance of
options or other rights to purchase such Common Stock thereunder; provided,
however, that to the extent any such option or other right to acquire any share
of Common Stock described in clause (i) above shall expire or be canceled prior
to the exercise thereof, the Common Stock issuable pursuant thereto or any
subsequent option or other right granted to acquire such Common Stock, shall no
longer be excepted by this paragraph 1B (8) .
1C. LIQUIDATING DIVIDENDS; PURCHASE RIGHTS.
(a) In case at any time after the date hereof the Company shall declare a
dividend upon the shares of Common Stock of any class payable otherwise than in
shares of Common Stock or Convertible Securities, otherwise than out of
consolidated earnings or consolidated earned surplus (determined in
accordance with generally accepted accounting principles, including the making
of appropriate deductions for minority interests, if any, in subsidiaries), and
otherwise than in the securities to which the provisions of clause (b) or (c)
below apply, and provided that such dividend shall not otherwise result in an
adjustment of the Exercise Price
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pursuant to any other provision hereof, the Company shall pay over to each
holder of Warrants, upon the exercise thereof on or after the dividend payment
date, the securities and other property (including cash) which such holder
would have received (together with all distributions thereon) if such holder
had exercised the Warrants held by it on the record date fixed in connection
with such dividend, and the Company shall take whatever steps are necessary or
appropriate to keep in reserve at all times such securities and other property
as shall be required to fulfill its obligations hereunder in respect of the
shares issuable upon the exercise of all the Warrants. For the purposes of the
foregoing, a dividend other than in cash shall be considered payable out of
consolidated earnings or consolidated retained earnings only to the extent that
such earnings or retained earnings are charged an amount equal to the fair
value of such dividend as determined by the Board of Directors of the Company.
(b) If at any time or from time to time on or after the date hereof the
Company shall grant, issue or sell any options or rights (other than
Convertible Securities) to purchase stock, warrants, securities or other
property rata to the holders of Common Stock of all classes ("Purchase
Rights"), then if it shall be entitled to an adjustment pursuant to paragraph
1B above and in lieu of such adjustment, each holder of Warrants shall be
entitled, at such holder's option, to acquire (whether or not such holder's
Warrants shall have been exercised), upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such holder could have acquired if
such holder had held the number of shares of Common Stock issuable upon the
exercise of such Warrants, immediately prior to the time or times at which the
Company granted, issued or sold such Purchase Rights.
(c) If at any time or from time to time on or after the date hereof the
Company shall declare a dividend or make any other distribution upon or by
reference to ownership of Common Stock of any class payable in shares of
capital stock of a corporation other than the Company ("Spin-Off Rights"), then
such dividend or distribution shall be deemed to be an issuance of Common
Stock, and in addition to an adjustment pursuant to paragraph 1B above, each
holder of Warrants shall be entitled, at the time of such dividend or
distribution, to acquire (whether or not such holder's Warrants shall have been
exercised), upon the terms applicable to such Spin-Off Rights, the aggregate
Spin-Off Rights which such holder could have acquired if such holder had held
the number of shares of Common Stock issuable upon the exercise of such
Warrants, immediately prior to the time or times at which the Company granted,
issued or sold such Spin-Off Rights.
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1D. SUBDIVISION OR COMBINATION OF STOCK. In case the Company shall at
any time subdivide its outstanding shares of Common Stock into a greater number
of shares, the Exercise Price in effect immediately prior to such subdivision
shall be proportionately reduced, and conversely, in case the outstanding
shares of Common Stock of the Company shall be combined into a smaller number
of shares, the Exercise Price in effect immediately prior to such combination
shall be proportionately increased.
1E. CHANGES IN COMMON STOCK. If any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or
merger of the Company with another corporation, or sale, transfer or other
disposition of all or substantially all of its properties to another
corporation, shall be effected, then, as a condition of such reorganization,
reclassification, consolidation, merger, sale, transfer or other disposition,
lawful and adequate provision shall be made whereby each holder of Warrants
shall thereafter have the right to purchase and receive upon the basis and upon
the terms and conditions herein specified and in lieu of the shares of the
Common Stock of the Company immediately theretofore issuable upon the exercise
of the Warrants, such shares of stock, securities or properties, if any, as may
be issuable or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore issuable upon the exercise of the Warrants
had such reorganization, reclassification, consolidation, merger, sale,
transfer or other disposition not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests of each
holder of Warrants to the end that the provisions hereof (including without
limitation provisions for adjustment of the Exercise Price) shall thereafter be
applicable, as nearly equivalent as may be practicable in relation to any
shares of stock, securities or properties thereafter deliverable upon the
exercise thereof. The Company shall not effect any such consolidation, merger,
sale, transfer or other disposition, unless prior to or simultaneously with the
consummation thereof the successor corporation (if other than the Company)
resulting from such consolidation or merger or the corporation purchasing or
otherwise acquiring such properties shall assume, by written instrument
executed and mailed or delivered to the holders of Warrants at the last address
of such holders appearing on the books of the Company, the obligation to
deliver to such holders such shares of stock, securities or properties as, in
accordance with the foregoing provisions, such holders may be entitled to
acquire. The above provisions of this subparagraph shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales,
transfers, or other dispositions.
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1F. NOTICE OF ADIUSTMENT. Upon any adjustment of the Exercise Price,
then and in each such case the Company shall promptly certify the Exercise
Price resulting from such adjustment and the increase or decrease, if any, in
the number of shares of Common Stock issuable upon the exercise of the Warrant
or Warrants held by each holder of Warrants, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
The Company shall promptly mail a copy of such certification to each holder of
Warrants.
1G. CERTAIN EVENTS. If any event occurs as to which in the opinion of
the Board of Directors of the Company the other provisions of this Section 1
are not strictly applicable or if strictly applicable would not fairly protect
the exercise rights of the holders of the Warrants in accordance with the
essential intent and principles of such provisions, then such Board of
Directors shall appoint a firm of independent certified public accountants
(which may be the regular auditors of the Company) of recognized national
standing, which shall give their opinion upon the adjustment, if any, on a
basis consistent with such essential intent and principles, necessary to
preserve, without dilution, the rights of the holders of the Warrants. Upon
receipt of such opinion by the Board of Directors, the Company shall forthwith
make the adjustments described therein; PROVIDED, HOWEVER, that no such
adjustment pursuant to this paragraph 1G shall have the effect of increasing
the Exercise Price as otherwise determined pursuant to this Section 1 except in
the event of a combination of shares of the type contemplated in paragraph 1D
and then in no event to an amount larger than the Exercise Price as adjusted
pursuant to paragraph 1H.
1H. PROHIBITION OF CERTAIN ACTIONS. The Company will not (a) authorize
or issue, or agree to authorize or issue, any shares of its capital stock of
any class preferred as to dividends or as to the distribution of assets upon
voluntary or involuntary liquidation, dissolution or winding-up of the Company
unless the rights of the holders thereof shall be limited to a fixed sum or
percentage of par value in respect of participation in dividends and in the
distribution of such assets or (b) take any action which would result in any
adjustment of the Exercise Price if the total number of shares of Common Stock
issuable after such action upon exercise of all of the Warrants would exceed
the total number of shares of Common Stock then authorized by the Company's
Certificate of Incorporation.
1I. STOCK TO BE RESERVED. The Company will at all times reserve and
keep available out of its authorized Common Stock, solely for the purpose of
issue upon the exercise of Warrants as herein provided, such number of shares
of Common Stock as shall then be issuable upon the exercise of all
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34
outstanding Warrants, and the Company will maintain at all times all other
rights and privileges sufficient to enable it to fulfill all its obligations
hereunder. The Company covenants that all shares of Common Stock which shall
be so issuable shall, upon issuance, be duly authorized, validly issued, fully
paid and nonassessable, free from preemptive or similar rights on the part of
the holders of any shares of capital stock or securities of the Company, and
free from all Liens and charges with respect to the issue thereof; and without
limiting the generality of the foregoing, the Company covenants that it will
from time to time take all such action as may be required to assure that the
par value, if any, per share of the Common Stock is at all times equal to or
less than the then effective Exercise Price. The Company will take all such
action as may be necessary to assure that such shares of Common Stock may be so
issued without violation by the Company of any applicable law or regulation, or
of any requirements of any domestic securities exchange upon which the Common
Stock may be listed. without limiting the foregoing, the Company will take all
such action as may be necessary to assure that, upon exercise of any of the
Warrants, an amount equal to the lesser of (a) the par value of each share of
Common Stock outstanding immediately prior to such exercise, or (b) the
Exercise Price, shall be credited to the Company's stated capital account for
each share of Common Stock issued upon such exercise.
1J. REGISTRATION AND LISTING OF COMMON STOCK. If any shares of Common
Stock required to be reserved for the purpose of the exercise of the Warrants
hereunder require registration with or approval of any governmental authority
under any Federal or state law (other than the Securities Act) before such
shares may be issued upon such exercise, the Company will, at its expense and
as expeditiously as possible, use its best efforts to cause such shares to be
duly registered or approved, as the case may be. Shares of Common Stock
issuable upon the exercise of the Warrants shall be registered by the Company
under the Securities Act or similar statute then in effect if required by
Article XI of the Note Agreement and subject to the conditions stated in such
Article. If and so long as the Common Stock is listed on any national
securities exchange, the Company will, at its expense, obtain promptly and
maintain the approval for listing on each such exchange upon official notice of
issuance, of shares of Common Stock issuable upon the exercise of the then
outstanding warrants and maintain the listing of such shares after their
issuance; and the Company will also list on such national securities exchange,
will register under the Exchange Act and will maintain such listing of, any
other securities that at any time are issuable upon the exercise of the
warrants, if and at the time that any securities of the same class shall be
listed on
35
such national securities exchange by the Company or shall require registration
under the Exchange Act.
1K. ISSUE TAX. The issuance of certificates for shares of Common
Stock upon the exercise of the Warrants shall be made without charge to the
holders of the Warrants exercised for any issuance tax in respect thereto.
1L. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any Warrant or of any shares of Common Stock
issued or issuable upon the exercise of any Warrant in any manner which
interferes with the timely exercise of such Warrant.
1M. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS. No Warrant shall entitle
any holder thereof to any of the rights of a shareholder of the Company. No
provision of the Note Agreement or of any Warrant, in the absence of the actual
exercise of such Warrant or any part thereof by the holder thereof into Common
Stock issuable upon such exercise, shall give rise to any liability on the part
of such holder as a shareholder of the Company, whether such liability shall be
asserted by the Company or by creditors of the Company.
SECTION 2. METHOD OF EXERCISE OF WARRANTS.
-------------------------------
The Warrants may be exercised by the surrender of this Certificate,
with the Form of Subscription attached hereto duly executed by the holder, to
the Company at its principal office, accompanied by payment of the Exercise
Price for the number of shares of Common Stock specified. The Warrants may be
exercised for less than the full number of shares of Common Stock called for
hereby by surrender of this Certificate in the manner and at the place provided
above, accompanied by payment for the number of shares of Common Stock being
purchased. If the Warrants should be exercised in part only, the Company
shall, upon surrender of this Warrant Certificate for cancellation, execute and
deliver a new Warrant Certificate evidencing the right of the holder to
purchase the balance of the shares purchasable hereunder. Upon receipt by the
Company of this Warrant Certificate at the office of the Company, in proper
form for exercise, accompanied by the full Exercise Price in cash or certified
or bank cashier's check, the holder shall be deemed to be the holder of record
of the shares of Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Common Stock shall not then be actually
delivered to the holder.
As soon as practicable after the exercise of these Warrants in whole or
in part and, in any event, within ten days thereafter, the Company at its
expense will cause to be
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issued in the name of and delivered to the holder a certificate or certificates
for the number of fully paid and nonassessable shares of Common Stock (and any
new Warrants) to which the holder shall be entitled upon such exercise. Each
certificate for shares of Common Stock so delivered shall be in such
denominations as may be requested by the holder and shall be registered in the
name of the holder or such other name as the holder may designate.
SECTION 3. MUTILATED OR MISSING WARRANT CERTIFICATES
-----------------------------------------
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Certificate, and (in the
case of loss, theft or destruction) of reasonably satisfactory indemnification
and upon surrender and cancellation of this Warrant Certificate, if mutilated,
the Company will execute and deliver a new Amended and Restated Warrant
Certificate of like tenor and date.
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Warrant Certificate to be duly executed, as of the day and year first above
written.
LDI CORPORATION
By:_____________________________
Title:__________________________
By:_____________________________
Title:__________________________
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Form of Subscription
DATE:_______________, 19__
To: LDI Corporation
The Undersigned, the holder of the attached Warrants, hereby irrevocably elects
to exercise all or part of the purchase right represented by such Warrants for,
and to purchase thereunder, ___________________ shares of Common Stock of LDI
Corporation (the "Company") and herewith makes payment of $ __________ to the
Company, evidenced by delivery of ______________, and requests that the
certificate of such shares be issued in the name of, and be delivered to,
_____________________, whose address is _________________________________.
__________________________________
(Name of Holder)
__________________________________
(Authorized Signatory)
__________________________________
(Address)
38
EXHIBIT E
CERTIFICATE OF PRESIDENT
Reference is made to the letter amendment dated October 18, 1995 (the
"Amendment") to the Note Purchase Agreement dated July 2, 1991 (the
"Agreement") between LDI Corporation (the "Company") and Olympus Private
Placement Fund, L.P. (the "Purchaser"). Terms used herein and not otherwise
defined have the meanings assigned to such terms in the Amendment.
In order to induce the Purchaser to enter into the Amendment, the
undersigned hereby certifies to the Purchaser as follows:
1. I am the President and Chief Executive Officer of the Company.
2. The resolutions set forth on Exhibit A attached hereto were
duly adopted by the Board of Directors of the Company at a meeting held
on October 18, 1995, and the same are in full force and effect on the
date hereof and have not been amended, modified or rescinded.
3. The Amendment has been duly authorized by the Board of
Directors of the Company and has been duly executed and delivered by
the Company.
4. There is no default or event of default existing or
continuing under the Credit Agreement, and after giving effect to the
Amendment, there is no Event of Default or Default under the
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
__ day of October, 1995.
_____________________________________
Xxxxx X. Xxxxxxxx
President and Chief Executive Officer
39
EXHIBIT A
RESOLUTIONS ADOPTED BY BOARD OF DIRECTORS OF LDI CORPORATION 10/18/95:
RESOLVED, that the Note Purchase Agreement dated July 2, 1991
(the "Agreement") between the Company and Olympus Private Placement
Fund, L.P. (the "Purchaser") and the Note and Warrants issued by the
Company pursuant thereto be amended as provided in the form of letter
amendment dated October 18, 1995 (the "Amendment") to, among other
things, (i) eliminate certain financial covenants from the Agreement,
(ii) change the interest rate on the Notes to 12-3/4% per annum,
payable quarterly, (iii) provide for an additional payment of interest
in the amount of $75,000, (iv) adjust the prepayment premium for the
period ending August 14, 1996, (v) adjust the Exercise Price of the
Warrants from $6.35 to $5.00 and (vi) extend the exercise period of
the Warrants to August 15, 1998;
FURTHER RESOLVED, that the officers of the Company be and they
hereby are authorized and directed to execute and deliver to the
Purchaser the Amendment, the amended and restated Note and Warrants
provided for therein and the Severance Payment Subordination
Agreements provided for therein;
FURTHER RESOLVED, that the officers of the Company be and they
hereby are authorized and directed to take all such actions, to pay
all such fees and other amounts and to execute and deliver all such
agreements, instruments, certificates and other documents as may be
necessary or desirable in order to carry out the intent of the
foregoing resolutions.
