<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------- --------------------
Commission File Number: 0-15994
-------
LDI CORPORATION
------------------------------------------------------------------------
(exact name of registrant as specified in its charter)
DELAWARE 31-1179824
-------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4770 Hinckley Industrial Parkway, Cleveland, Ohio 44109-6096
- -------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (216) 661-5400
--------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
6,727,457 shares of Common Stock, $.01 par value,
as of May 31, 1995
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
LDI CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30, 1995 AND 1994
(Amounts in Thousands, Except Per Share Data)
===============================================================================
<TABLE>
<CAPTION>
1995 1994
-------- --------
<S> <C> <C>
REVENUES:
Leasing .................................... $ 19,836 $ 20,675
Direct sales ............................... 10,694 24,049
Technical services ......................... 3,234 3,923
Equity in earnings of 50% owned affiliate... 250 207
Other ...................................... 547 183
-------- --------
Total ......................................... 34,561 49,037
-------- --------
COSTS AND EXPENSES:
Leasing .................................... 11,167 11,243
Direct sales ............................... 8,908 20,577
Technical services ......................... 1,715 2,264
Interest ................................... 6,714 7,419
Debt financing fees ........................ 1,169 416
Selling, general, and administrative ....... 5,386 8,468
-------- --------
Total ......................................... 35,059 50,387
-------- --------
EARNINGS (LOSS) FROM CONTINUING
OPERATIONS BEFORE INCOME TAXES ............. (498) (1,350)
Income Tax Expense (Benefit) .................. (199) (513)
-------- --------
NET EARNINGS (LOSS) ........................... $ (299) $ (837)
======== ========
EARNINGS (LOSS) PER PRIMARY SHARE ............. $ (.04) $ (.12)
======== ========
Average Shares Outstanding .................... 6,727 6,727
======== ========
</TABLE>
NOTE: Certain reclassifications have been made to the prior year's consolidated
financial statements to conform to the current period's presentation.
See the accompanying notes to consolidated financial statements.
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<PAGE> 3
LDI CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1995 (Unaudited) AND JANUARY 31, 1995
(Dollars in Thousands)
================================================================================
<TABLE>
<CAPTION>
April 30, January 31,
1995 1995
---------------- -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents............................................. $ 12,883 $ 11,744
Receivables - net of allowance for doubtful accounts.................. 21,418 23,244
Inventory held for lease or sale...................................... 9,803 10,933
Leased assets:
Capital leases..................................................... 288,460 311,478
Operating leases - net of accumulated depreciation of $24,152
and $22,120 .................................................... 33,292 37,610
Land, buildings, equipment and furniture - net of accumulated
depreciation of $8,543 and $8,062 .................................. 12,297 12,715
Other assets.......................................................... 17,440 19,185
---------------- -----------------
Total........................................................ $ 395,593 $ 426,909
================ =================
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Accounts payable...................................................... $ 9,743 $ 13,008
Accrued liabilities................................................... 4,030 5,553
Notes payable......................................................... 98,065 107,855
Subordinated notes.................................................... 10,000 10,000
Deferred income taxes................................................. 3,721 3,933
Nonrecourse lease financing........................................... 211,755 227,574
Reserves and liabilities related to discontinued operations and
restructuring programs............................................. 1,600 1,952
Other liabilities..................................................... 5,367 5,439
---------------- -----------------
Total liabilities............................................ 344,281 375,314
---------------- -----------------
SHAREHOLDERS' EQUITY:
Common stock, par value of $.01 - 20,000,000 shares
authorized; 6,828,984 shares issued................................. 68 68
Additional paid-in capital............................................ 45,013 44,997
Retained earnings..................................................... 7,491 7,790
Treasury shares at cost - 101,527 shares.............................. (1,260) (1,260)
---------------- -----------------
Total shareholders' equity................................... 51,312 51,595
---------------- -----------------
Total...................................................... $ 395,593 $ 426,909
================ =================
</TABLE>
NOTE: The balance sheet at January 31, 1995 has been derived from the audited
financial statements at that date but does not include all of the information
and notes required by generally accepted accounting principles for complete
financial statements.
See the accompanying notes to consolidated financial statements.
- 3 -
<PAGE> 4
LDI CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED APRIL 30, 1995 AND 1994
(Dollars in Thousands)
===============================================================================
<TABLE>
<CAPTION>
1995 1994
--------------- --------------
<S> <C> <C>
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net loss from continuing operations................................ $ (299) $ (837)
Adjustments to reconcile net earnings (loss) to net cash flow from
operating sctivities:
Depreciation..................................................... 4,434 5,672
Deferred income taxes............................................ (212) (513)
Additions to capital leases...................................... (18,790) (14,742)
Principal portion of lease rentals received...................... 41,808 50,807
Purchases of inventory for resale................................. (7,777) (27,894)
Sales, transfers, and disposals of inventory and equipment........ 16,803 43,312
Change in reserves related to restructuring programs.............. (352) (1,485)
Change in accounts receivable..................................... 1,826 345
Change in accounts payable........................................ (3,265) (9,984)
Change in accrued expenses and other liabilities.................. (1,565) (2,157)
Other............................................................. 1,746 (1,008)
--------------- --------------
Cash provided by continuing operations............................. 34,357 41,516
--------------- --------------
Discontinued operations:
Change in assets and liabilities (except reserves) of
discontinued operations......................................... - 8,927
Change in reserves................................................ - (1,715)
--------------- --------------
Cash provided by discontinued operations........................... -0- 7,212
--------------- --------------
Total........................................................... 34,357 48,728
--------------- --------------
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of equipment for lease................................... (7,463) (22,953)
Purchases of land, buildings, equipment and furniture.............. (130) (570)
Proceeds from sale of businesses, properties and other assets...... - 100
--------------- --------------
Total........................................................... (7,593) (23,423)
--------------- --------------
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Proceeds from nonrecourse lease financing.......................... 18,882 32,925
Payments on nonrecourse lease financing............................ (34,701) (40,154)
Change in revolving and line of credit facilities.................. (8,724) (961)
Payments on term loans and notes................................... (1,066) (5,000)
Other.............................................................. (16) (7)
--------------- --------------
Total........................................................... (25,625) (13,197)
--------------- --------------
Increase in Cash and Cash Equivalents................................. 1,139 12,108
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD...................... 11,744 8,972
--------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................ $ 12,883 $ 21,080
=============== ==============
</TABLE>
See the accompanying notes to consolidated financial statements.
- 4 -
<PAGE> 5
LDI CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED APRIL 30, 1995 (UNAUDITED) AND
FOR THE YEAR ENDED JANUARY 31, 1995
(Dollars in Thousands, Except Per Share Data)
================================================================================
<TABLE>
<CAPTION>
Common
Additional stock in Total
Common paid-in Retained treasury at shareholders'
stock capital earnings cost equity
--------- ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE AT FEBRUARY 1, 1994...... $ 68 $ 44,922 $ 26,354 $ (1,260) $ 70,084
Net loss...................... (18,564) (18,564)
Compensation expense under
stock award plan for shares
issued in a prior year....... 75 75
--------- ----------- ---------- ----------- -------------
BALANCE AT JANUARY 31, 1995...... 68 44,997 7,790 (1,260) 51,595
Net loss...................... (299) (299)
Compensation expense under
stock award plan for shares
issued in a prior year....... 16 16
--------- ----------- ---------- ----------- -------------
BALANCE AT APRIL 30, 1995........ $ 68 $ 45,013 $ 7,491 $ (1,260) $ 51,312
========= =========== ========== =========== =============
</TABLE>
See the accompanying notes to consolidated financial statements.
- 5 -
<PAGE> 6
LDI CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Dollars in Thousands, Except Where Indicated)
================================================================================
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals, except as otherwise disclosed) considered
necessary for a fair presentation have been included. For further information,
refer to the consolidated financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended January 31, 1995.
2. LIQUIDITY AND DEBT REFINANCING
As discussed in Note 5, the Company's senior secured revolving credit
facility and senior secured term notes were scheduled to mature on April 30,
1995. Pending finalization of a new agreement, the lenders have extended the
maturity date of the credit facility and term notes through June 30, 1995. Due
to the operating results for the year ended January 31, 1995, and the three
months ended April 30, 1995, the Company was in noncompliance with certain
financial covenants of its senior debt agreements and subordinated notes as
described in Notes 5 and 7. The Company has obtained amendments or waivers for
noncompliance with these covenants.
The Company is negotiating with its lenders to refinance its senior secured
recourse debt and with the holder of its subordinated notes to effect permanent
amendments of the financial covenants. The Company's ability to continue to meet
its liquidity requirements is dependent upon its ability to successfully
complete these negotiations and, in the meantime, upon the willingness of its
lenders to continue to grant extensions and waivers or otherwise not demand
immediate payment with respect to such indebtedness. Based upon the status of
the negotiations to date, management believes that a new senior debt agreement
will be finalized and the subordinated notes will be amended. The Company
expects, however, that the effective interest rate of the new senior debt
agreement, including interest expense and debt financing fees, may be higher
than the effective interest rate of the existing senior credit facility and term
loans.
The Company is also negotiating a new financing program which, if
completed, would provide nonrecourse financing of lease equipment purchases
until the related lease documentation is finalized and permanent nonrecourse
funding is obtained. Management believes that cash generated from operations,
cash obtained from this new nonrecourse interim financing program, borrowings
under the new senior credit facility, financing from existing nonrecourse
programs and other sources and, if necessary, proceeds from sales of leases or
other assets will provide sufficient funds to meet the Company's reasonably
foreseeable liquidity needs.
The Company's consolidated financial statements have been presented on the
basis that it is a going concern, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. Until a
new senior secured recourse debt agreement is finalized and the subordinated
notes are amended, there is substantial doubt concerning the Company's ability
to continue as a going concern for a reasonable period of time. The consolidated
financial statements do not include any adjustments relating to the
recoverability of assets that may result should the Company be unable to
continue as a going concern.
-6-
<PAGE> 7
3. RECEIVABLES
<TABLE>
<CAPTION>
April 30, January 31,
1995 1995
-------- ----------
<S> <C> <C>
Trade accounts............................. $16,348 $19,351
Trade notes................................ 7,159 7,688
Other...................................... 1,935 2,209
Allowance for doubtful accounts............ (4,024) (6,004)
------- -------
Net receivables............................ $21,418 $23,244
======= =======
</TABLE>
4. ACCRUED AND OTHER LIABILITIES
<TABLE>
<CAPTION>
April 30, January 31,
1995 1995
-------- ----------
<S> <C> <C>
Accrued liabilities consist of:
Compensation............................... $1,347 $2,189
Interest................................... 755 1,078
Sales tax.................................. 320 354
Other...................................... 1,608 1,932
------ ------
Total...................................... $4,030 $5,553
====== ======
Other liabilities consist of:
Customer rental prepayments................ $2,626 $3,668
Deferred revenues.......................... 2,735 1,724
Other...................................... 6 47
------ ------
Total...................................... $5,367 $5,439
====== ======
</TABLE>
5. NOTES PAYABLE
<TABLE>
<CAPTION>
April 30, January 31,
1995 1995
-------- ----------
<S> <C> <C>
Revolving credit facilities................ $91,583 $100,307
Term loans and notes....................... 6,482 7,548
------- --------
Total...................................... $98,065 $107,855
======= ========
</TABLE>
As of April 30, 1995, the Company had a $96.1 million secured revolving
credit facility with a group of banks that provides for a floating interest rate
based on either LIBOR or the prime rate. As described in Note 2, the maturity
date of the facility has been extended through June 30, 1995. At April 30, 1995,
$95.4 million was outstanding on this facility.
Subsequent to April 30, 1995, $3.8 million of the borrowings under the
secured amortizing revolving credit facility were financed on a nonrecourse
basis. Accordingly, these amounts have been included in nonrecourse lease
financing at April 30, 1995.
The Company also had a secured amortizing term loan. This facility had an
outstanding balance of $.3 million at April 30, 1995, and was paid in full, as
scheduled, on May 10, 1995.
The Company also has secured installment notes that aggregated $6.1 million
at April 30, 1995, which was the originally scheduled date of maturity. The
maturity date of the notes has also been extended through June 30, 1995, and
certain waivers have been obtained from the holders as described in Note 2.
Payments of $0.5 million were made on the notes on May 31, 1995.
Installment notes consist of fixed rate instruments with interest rates
ranging from 9.7 percent to 10.0 percent.
Under the terms of the above debt agreements, the Company is required to
maintain certain liquidity, leverage, and net worth ratios. The covenants also
prohibit the payment of cash dividends and place restrictions on the
- 7 -
<PAGE> 8
amount of borrowings under the facilities based on the amounts of certain assets
as defined in the agreements. The loan agreements are secured by receivables,
inventories and substantially all other unpledged assets of the Company. As
described in Note 2, at April 30, 1995, the Company was in noncompliance with
certain financial covenants and has obtained amendments or waivers through June
30, 1995.
6. NONRECOURSE LEASE FINANCING
<TABLE>
<CAPTION>
April 30, January 31,
1995 1995
-------- ----------
<S> <C> <C>
Financial institutions............................ $108,460 $119,365
Commercial paper.................................. 103,295 108,209
-------- --------
Total............................................. $211,755 $227,574
======== ========
</TABLE>
Nonrecourse discounted lease rentals consist of fixed rate capital obtained
from financial institutions on a nonrecourse basis. The lender has a security
interest in the lease rental stream and the underlying assets, but has no
recourse to the Company in the case of default by the lessee.
The Company established two asset-backed financing programs to fund lease
transactions on a nonrecourse basis through the use of commercial paper
securitized by lease rental receivables. The programs are rated A-1 by Standard
& Poor's or P-1 by Moody's. These ratings represent the highest attainable
ratings available under the respective classification systems.
Under one of the programs, the Company sold lease receivables to a wholly
owned special purpose corporation that issues commercial paper backed by an
annually renewing five year letter of credit. At April 30, 1995, $21.7 million
of commercial paper was outstanding under this program. Effective May 1, 1994,
the letter of credit under this program was not extended, however, leases funded
previously continue to amortize under the terms of the existing agreement.
A second securitized program provides for the financing of lease
receivables through an independent special purpose corporation which issues
commercial paper. This program is backed by a surety bond. The availability to
finance under this program was increased from $75 million to $125 million during
the fiscal year ended January 31, 1995. Effective with the completion of the
increase, the program began operating through a wholly owned subsidiary of the
Company to which the Company sells lease receivables and transfers the related
equipment. The subsidiary then transfers the receivables to the independent
corporation to support the issuance of commercial paper, which is nonrecourse to
the Company. At April 30, 1995, $81.6 million of commercial paper was
outstanding under this program. The Company has obtained waivers under this
program for noncompliance with certain covenants for the quarter ended April 30,
1995.
7. SUBORDINATED NOTES
The Company has $10 million of 9.375 percent subordinated notes, with
interest payable semiannually, maturing in August 2000. The notes require annual
repayments of $2.5 million beginning in August 1997. The notes are callable by
the Company at a premium of 109 3/8 beginning August 1994, with the premium
declining ratably to par in August 1999.
The Company also issued a total of 1,574,803 warrants in conjunction with
these notes. Each warrant is exercisable by the holder through August 15, 1996,
into one share of the Company's common stock at $6.35 per share. The exercise
price is subject to adjustment for stock dividends, splits and certain other
issuances of common stock.
At April 30, 1995, the Company was in noncompliance with certain financial
covenants and has obtained amendments or waivers through June 30, 1995.
- 8 -
<PAGE> 9
8. RESTRUCTURED OPERATIONS
During the year ended January 31, 1995, the Company (1) sold substantially
all the assets of its personal computer distribution and direct sales business;
(2) completed the sale of the stock of the Company's Canadian leasing
subsidiary; and (3) sold certain assets of its point-of-sale equipment
businesses.
The revenues and expenses of restructured operations are included in the
results of consolidated operations through the date of disposition.
9. DISCONTINUED OPERATIONS
During the year ended January 31, 1995, the Company (1) completed the
liquidation and closing of its retail computer superstores; (2) completed the
liquidation and closing of its retail PC outlet stores; (3) sold certain assets
of its software distribution business; and (4) sold certain assets and
transferred certain liabilities of its catalog distribution business.
The consolidated financial statements disclose the operating results of
discontinued operations separately from continuing operations.
10. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
THREE MONTHS ENDED APRIL 30,
----------------------------
1995 1994
---------- -------
<S> <C> <C>
Cash paid for:
Interest................................ $7,038 $7,629
Income taxes............................ $ 5 None
</TABLE>
- 9 -
<PAGE> 10
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
LDI CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
Three Months Ended April 30, 1995
================================================================================
LIQUIDITY AND CAPITAL RESOURCES
The Company uses a combination of credit facilities, term loans and
internally generated cash flow to finance, on an interim basis, the acquisition
of equipment for lease or sale. Upon completion of lease documentation, the
Company generally finances the present value of future lease rentals by the
assignment of such rentals to banks, insurance companies, or other lenders on a
discounted, nonrecourse basis. In this manner, a substantial portion of the
equipment cost is financed on a long-term basis and the Company limits its risk,
if any, to its equity investment in the equipment. In December 1994, the Company
completed a $50 million expansion of the capacity of one of its securitized
lease receivable financing programs from $75 million to $125 million (see Note 6
of "Notes to Consolidated Financial Statements").
The Company enters into interest rate swap and cap agreements to manage
exposure to changes in interest rates for portions of its recourse and
nonrecourse debt. The agreements generally involve the exchange of fixed or
floating rate interest payments without the exchange of the underlying principal
amounts.
During the three months ended April 30, 1995, cash generated from operating
activities was $34 million as compared to $49 million for the period ended April
30, 1994. This $15 million decrease is primarily attributable to the following:
decrease in cash inflows from the sale or disposal of inventory and off-lease
equipment ($26 million); lower cash outflows for purchases of inventory for
resale ($20 million), and a reduction in cash inflows from changes in assets and
liabilities of discontinued operations ($7 million). Cash used in investing
activities was $8 million for the period ended April 30, 1995 as compared to $23
million for the period ended April 30, 1994. This decrease of $15 million was
due to a $15 million reduction in equipment purchased for lease. Cash used in
financing activities was $26 million for the period ended April 30, 1995 as
compared to $13 million for the period ended April 30, 1994. This $13 million
increase was primarily the result of incremental payments of $8 million on
revolving credit facilities and a reduction of $9 million in net proceeds from
nonrecourse lease financings.
At April 30, 1995, the Company had a total of $320 million of recourse and
nonrecourse interest-bearing obligations, of which $209 million were on a
floating rate basis. Of the total floating rate financings, $92 million were
converted to fixed rate financing through interest rate swap agreements and $20
million were subject to interest rate ceilings through interest rate cap
agreements.
As discussed in Note 5 of "Notes to Consolidated Financial Statements,"
the Company's senior secured revolving credit facility and senior secured term
notes were scheduled to mature on April 30, 1995. Pending finalization of a new
agreement, the lenders have extended the maturity date of the credit facility
and term notes through June 30, 1995. Due to the operating results for the year
ended January 31, 1995, and the three months ended April 30, 1995, the Company
was in noncompliance with certain financial covenants of its senior debt
agreements and subordinated notes as described in Notes 5 and 7. The Company
has obtained amendments or waivers for noncompliance with these covenants.
The Company is negotiating with its lenders to refinance its senior secured
recourse debt and with the holder of its subordinated notes to effect permanent
amendments of the financial covenants. The Company's ability to continue to meet
its liquidity requirements is dependent upon its ability to successfully
complete these negotiations and, in the meantime, upon the willingness of its
lenders to continue to grant extensions and waivers or otherwise not demand
immediate payment with respect to such indebtedness. Based upon the status of
the negotiations to date, management believes that a new senior debt agreement
will be finalized and the subordinated notes will be amended. The Company
expects, however, that the effective interest rate of the new senior debt
agreement, including interest expense and debt financing fees, may be higher
than the effective interest rate of the existing senior credit facility and term
loans.
-10-
<PAGE> 11
The Company is also negotiating a new financing program which, if
completed, would provide nonrecourse financing of lease equipment purchases
until the related lease documentation is finalized and permanent nonrecourse
funding is obtained. Management believes that cash generated from operations,
cash obtained from this new nonrecourse interim financing program, borrowings
under the new senior credit facility, financing from existing nonrecourse
programs and other sources and, if necessary, proceeds from sales of leases or
other assets will provide sufficient funds to meet the Company's reasonably
foreseeable liquidity needs.
The Company does not have any material commitments for capital
expenditures. The Company believes that inflation has not been a significant
factor in its business.
-11-
<PAGE> 12
LDI CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
Three Months Ended April 30, 1995 as
Compared to the Three Months Ended April 30, 1994
================================================================================
LEASING:
A summary of the operating results from leasing for the three months
ended April 30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
(Dollars in Thousands) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Leasing Revenues $ 19,836 $ 20,675
Cost of Leasing 11,167 11,243
------------- -----------------
Gross Leasing Margin $ 8,669 $ 9,432
============= =================
Percent of Revenue 43.7% 45.6%
</TABLE>
A summary of new leasing activity, which is a measure of business volume,
for the three months ended April 30, 1995, and 1994, is as follows:
<TABLE>
<CAPTION>
Cost of Leased Equipment
----------------------------------------------------
1995 1994
------------------------ ---------------------
<S> <C> <C> <C> <C>
New Equipment Leases $12,584 97.8% $ 11,044 71.9%
Re-Leased Equipment 289 2.2% 4,322 28.1%
------- ----- -------- -----
TOTAL $12,873 100.0% $ 15,366 100.0%
======= ===== ======== =====
Sales-Type Leases $ 6,169 47.9% $ 1,309 8.5%
Direct Finance Leases 3,877 30.1% 10,266 66.8%
Operating Leases 2,827 22.0% 3,791 24.7%
------- ----- -------- -----
TOTAL $12,873 100.0% $ 15,366 100.0%
======= ===== ======== =====
</TABLE>
<TABLE>
<CAPTION>
Number of Transactions
----------------------------------------------------
1995 1994
------------------------ --------------------
<S> <C> <C> <C> <C>
New Equipment Leases 168 86.6% 219 77.1%
Re-Leased Equipment 26 13.4% 65 22.9%
--- ----- --- -----
TOTAL 194 100.0% 284 100.0%
=== ===== === =====
Sales-Type Leases 137 70.6% 181 63.7%
Direct Finance Leases 40 20.6% 76 26.8%
Operating Leases 17 8.8% 27 9.5%
--- ----- --- -----
TOTAL 194 100.0% 284 100.0%
=== ===== === =====
</TABLE>
For the three months ended April 30, 1995, aggregate leasing revenues
declined $0.8 million (4%) from the comparable peiod in the prior year. The
decline is attributable to reduced revenues of $1.9 million resulting from the
sale of LDI's Canadian leasing subsidiary in May 1994 and decreases in finance
income and operating lease rental of $2.3 million and $1.5 million,
respectively; offset partially by an increase in sales-type lease revenues of
$4.9 million. The decreases in finance income and operating lease rentals are
primarily attributable to the decrease in the leased asset portfolio and lower
amounts of short-term PC rental revenues. The increase in sales-type lease
revenues resulted from an unusually low mix of sales-type leases originated
during the quarter ended April 30, 1994 as compared to the current period and
historical trends.
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<PAGE> 13
Costs of leasing were approximately the same as those of the prior period
but increased as a percentage of leasing revenue by 2%. The percentage increase
is primarily attributable to a decline in finance income during the current
period. These revenues bear no direct costs of leasing. Consequently, when these
revenues account for a smaller portion of the overall revenue mix, costs of
leasing as a percentage of total revenue tend to increase. Cost of new leased
equipment increased $1.5 million while the cost of re-leased equipment declined
$4.0 million from the prior year's quarter. The decrease in the amount of
previously leased equipment costs as compared to the quarter ended April 30,
1994 also contributed to the lower gross margin percentage as these leases
typically have higher profit margins than new equipment leases.
DIRECT SALES:
A summary of the operating results from direct sales for the three months
ended April 30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
Restructured Reported
Core Operations(1) Operations(2) Operations(2)
-------------------- ------------------- -------------------
(Dollars in Thousands) 1995 1994 1995 1994 1995 1994
- ---------------------- -------------------- ------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Direct Sales $ 10,694 $8,494 -- $ 15,555 $ 10,694 $ 24,049
Cost of Direct Sales 8,908 7,247 -- 13,330 8,908 20,577
------------------- ------------------- -------------------
Gross Sales Margins $ 1,786 $1,247 -- $ 2,225 $ 1,786 $ 3,472
=================== =================== ===================
Percent of Sales 16.7% 14.7% -- 14.3% 16.7% 14.4%
</TABLE>
(1) Core operations include: Leasing Services, Technology Services, and PC
Rentals which were identified in the strategic plan as those product
(2) Restructured operations include the results of business units which
are, for financial statement presentation purposes only, considered to
be a part of reported operations. As discussed in Note 8 of Notes to
Consolidated Financial Statements, the restructured operations were
either sold or substantially liquidated during the year ended January
31, 1995.
Core operations' direct sales for the three months ended April 30, 1995
increased approximately $2 million (26.0%) from the prior year's quarter. This
increase resulted primarily from incremental sales of off-lease equipment to
existing lease customers. The 2% gross sales margin increase is primarily
the result of such incremental sales, which normally have a higher gross margin
percentage than sales to dealers, brokers, or other third parties.
TECHNICAL SERVICES:
A summary of the operating results from technical services for the three
months ended April 30, 1995 and 1994 is as follows:
<TABLE>
<CAPTION>
(In Thousands) 1995 1994
- -----------------------------------------------------------------
<S> <C> <C>
Services Revenues $ 3,234 $ 3,923
Cost of Services 1,715 2,264
--------------- ----------------
Gross Margin $ 1,519 $ 1,659
=============== ================
Percent of Revenues 47.0% 42.3%
</TABLE>
For the three months ended April 30, 1995, technical services revenues
decreased by 18% from the prior year's first quarter. The revenue decline
reflects a decrease in the Company's technical services revenue base as well as
a trend toward lower per unit maintenance revenue associated with the decreasing
cost of new computer and related equipment.
The gross margin percentage increased 4.7%, reflecting lower labor and
parts costs incurred during the current period.
- 13 -
<PAGE> 14
INTEREST EXPENSE:
For the three months ended April 30, 1995, interest expense decreased by
9.5% from the prior year's quarter, primarily as a result of a $116 million
(26%) reduction in the average amount of outstanding debt offset by an increase
in the average rate of interest.
DEBT FINANCING FEES:
Debt financing fees increased during the quarter ended April 30, 1995 by
181% primarily due to amortization of fees associated with the revolving credit
facility and term notes discussed in Note 5.
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES:
For the three months ended April 30, 1995, selling, general, and
administrative expenses declined by $3.1 million (36%) from the comparable
quarter in the prior year. The reduction was due primarily to the effect of the
sale of the restructured businesses ($2.3 million) and the implementation of
cost reduction programs.
INCOME TAXES:
The effective income tax benefit rate for continuing operations for the
three months ended April 30, 1995 was 40% and is consistent with the comparable
prior year's period.
- 14 -
<PAGE> 15
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS. The following Exhibits are filed herewith:
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
2.01 Asset Acquisition Agreement dated May 31, 1994, between LDI
Corporation and LDI Computer Systems, Inc., as Sellers, and MRK
Computer Systems, Inc., as Buyer (Included as an exhibit to the
Registrant's Quarterly Report on Form 10-Q (No. 0-15994) for the
quarter ended July 31, 1994, and incorporated herein by
reference.)
3.01 Restated Certificate of Incorporation (Included as an exhibit to
the Registrant's Registration Statement on Form S-1 (No.
33-14486) and incorporated herein by reference.)
3.02 By-laws, as amended (Included as an exhibit to the Registrant's
Quarterly Report on Form 10-Q (No. 0-15994) for the quarter ended
October 31, 1994, and incorporated herein by reference.)
4.01 Specimen Stock Certificate (Included as an exhibit to the
Registrant's Registration Statement on Form S-1 (No 33-14486) and
incorporated herein by reference.)
4.02 Note Purchase Agreement dated as of July 2, 1991, between
Registrant and Olympus Private Placement Fund, L.P. (Included as
an exhibit to the Registrant's Quarterly Report on Form 10-Q (No.
0-15994) for the quarter ended July 31, 1991, and incorporated
herein by reference.)
4.03 Amendment dated April 29, 1994, to Note Purchase Agreement dated
as of July 2, 1991, between Registrant and Olympus Private
Placement Fund, L.P. (Included as an exhibit to the Registrant's
Quarterly Report on Form 10-Q (No. 0-15994) for the quarter ended
April 30, 1994, and incorporated herein by reference.)
4.04 Form of Indemnification Agreement (Included as an exhibit to the
Registrant's Registration Statement on Form S-1 (No. 33-14486)
and incorporated herein by reference.)
4.05 Stockholders' Agreement dated May 22, 1987, among the Registrant,
Robert S. Kendall, Michael R. Kennedy, Thomas A. Cutter, Ronald
M. Lipson, Jay J. Ross, Primus Capital Fund and National City
Venture Corporation, as amended (Included as an exhibit to the
Registrant's Annual Report on Form 10-K (No. 0-15994) for the
year ended January 31, 1991, and incorporated herein by
reference.)
4.06 Amended and Restated Credit Agreement dated November 16, 1990,
between LDI Lease Funding Corporation and the Dai-Ichi Kangyo
Bank Ltd., Chicago Branch, and specimen Nonrecourse Promissory
Note of LDI Lease Funding Corporation (Included as an exhibit to
the Registrant's Annual Report on Form 10-K (No. 0-15994) for the
year ended January 31, 1992, and incorporated herein by
reference.)
4.07 First Amendment dated August 1, 1991, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Ltd., Chicago
Branch (Included as an exhibit to the Registrant's Annual Report
on Form 10-K (No. 0-15994) for the year ended January 31, 1992,
and incorporated herein by reference.)
4.08 Second Amendment dated November 15, 1991, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Ltd., Chicago
Branch (Included as an exhibit to the Registrant's Annual Report
on Form 10-K (No. 0-15994) for the year ended January 31, 1992,
and incorporated herein by reference.)
</TABLE>
- 15 -
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
4.09 Third Amendment dated January 15, 1992, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Ltd., Chicago
Branch (Included as an exhibit to the Registrant's Annual Report
on Form 10-K (No. 0-15994) for the year ended January 31, 1992,
and incorporated herein by reference.)
4.10 Fourth Amendment dated April 29, 1992, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Ltd., Chicago
Branch (Included as an exhibit to the Registrant's Quarterly
Report on Form 10-Q (No. 0-15994) for the quarter ended April 30,
1992, and incorporated herein by reference.)
4.11 Fifth Amendment dated October 1, 1992, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Limited, Chicago
Branch (Included as an exhibit to the Registrant's Quarterly
Report on Form 10-Q (No. 0-15994) for the quarter ended October
31, 1992, and incorporated herein by reference.)
4.12 Sixth Amendment dated July 15, 1993, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Limited, Chicago
Branch (Included as an exhibit to the Registrant's Annual Report
on Form 10-Q (No. 0-15994) for the quarter ended August 31, 1993,
and incorporated herein by reference.)
4.13 Seventh Amendment dated October 1, 1993, to Amended and Restated
Credit Agreement dated November 16, 1990, between LDI Lease
Funding Corporation and the Dai-Ichi Kangyo Bank Limited, Chicago
Branch (Included as an exhibit to the Registrant's Annual Report
on Form 10-Q (No. 0-15994) for the quarter ended October 31,
1993, and incorporated herein by reference.)
4.14 Lease Receivables Transfer Agreement dated as of October 7, 1994,
among LDI Lease Receivables Funding Corp., CXC Incorporated and
Citicorp North America, Inc. (Included as an exhibit to the
Registrant's Quarterly Report on Form 10-Q (No. 0-15994) for the
quarter ended October 31, 1994, and incorporated herein by
reference.)
4.15 Lease Receivables Purchase and Contribution Agreement dated as of
October 7, 1994, between LDI Lease Receivables Funding Corp. and
Registrant. (Included as an exhibit to the Registrant's Quarterly
Report on Form 10-Q (No. 0-15994) for the quarter ended October
31, 1994, and incorporated herein by reference.)
4.16 Note Purchase Agreement dated as of August 1, 1989, among the
Registrant, Northwestern National Life Insurance Company and the
other parties listed in Appendix I thereto (Included as an
exhibit to the Registrant's Quarterly Report on Form 10-Q (No.
0-15994) for the quarter ended October 31, 1989, and incorporated
herein by reference.)
4.17 Amendment dated as of January 31, 1992, to the Note Purchase
Agreement dated August 31, 1989, among the Registrant,
Northwestern National Life Insurance Company and the other
parties listed in Appendix I thereto (Included as an exhibit to
the Registrant's Quarterly Report on Form 10-Q (No. 0-15994) for
the quarter ended April 30, 1992, and incorporated herein by
reference.)
4.18 Amendment dated May 2, 1994, to Note Purchase Agreement dated
August 31, 1989, among Registrant, Northwestern National Life
Insurance Company and the other parties listed in Appendix I
thereto (Included as an exhibit to the Registrant's Annual Report
on Form 10-K (No. 0-15994) for the year ended January 31, 1994,
and incorporated herein by reference.)
4.19 Letter Amendment dated July 29, 1994, to Note Purchase Agreement
dated August 31, 1989, among Registrant, Northwestern National
Life Insurance Company and the other parties listed in Appendix I
thereto (Included as an exhibit to the Registrant's Quarterly
Report on Form 10-Q (No. 0-15994) for the quarter ended July 31,
1994, and incorporated herein by reference.)
</TABLE>
- 16 -
<PAGE> 17
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
4.20 Amended and Restated Promissory Note of the Registrant dated as
of July 1, 1993, in favor of National Westminster Bank USA
(Included as an exhibit to the Registrant's Quarterly Report on
Form 10-Q (No. 0-15994) for the quarter ended October 31, 1993,
and incorporated herein by reference.)
4.21 Amendment dated April 29, 1994, to Amended and Restated
Promissory Note of Registrant dated as of July 1, 1993, in favor
of National Westminster Bank USA (Included as an exhibit to the
Registrant's Quarterly Report on Form 10-Q (No. 0-15994) for the
quarter ended April 30, 1994, and incorporated herein by
reference.)
4.22 Second Amended and Restated Credit Agreement dated July 29, 1994,
among Registrant, certain Commercial Lending Institutions, and
National City Bank, Society National Bank and Continental Bank
N.A., as co-agents (Included as an exhibit to the Registrant's
Quarterly Report on Form 10-Q (No. 0-15994) for the quarter ended
July 31, 1994, and incorporated herein by reference.)
4.23 Consent, Waiver and Amendment No. 1 dated as of January 20, 1995
to Second Amendment and Restated Credit Agreement dated July 29,
1994 (Included as an exhibit to the Registrant's Annual Report on
Form 10-K (No. 0-15994) for the year ended January 31, 1995, and
incorporated herein by reference.)
4.24 Amendment No. 2 dated as of March 10, 1995 to Second Amended and
Restated Credit Agreement dated July 29, 1994 (Included as an
exhibit to the Registrant's Annual Report on Form 10-K (No.
0-15994) for the year ended January 31, 1995, and incorporated
herein by reference.)
4.25 Amendment No. 3 dated as of April 28, 1995 to Second Amended and
Restated Credit Agreement dated July 29, 1994 (Included as an
exhibit to the Registrant's Annual Report on Form 10-K (No.
0-15994) for the year ended January 31, 1995, and incorporated
herein by reference.)
4.26 Letter Amendment dated as of April 28, 1995 to Note Purchase
Agreement dated August 31, 1989, among registrant, Northwestern
National Life Insurance Company and the other parties listed in
Appendix I thereto (Included as an exhibit to the Registrant's
Annual Report on Form 10-K (No. 0-15994) for the year ended
January 31, 1995, and incorporated herein by reference.)
4.27 Amendment No. 4 dated as of May 15, 1995 to Second Amended and
Restated Credit Agreement dated July 29, 1994 (Included as an
exhibit to the Registrant's Annual Report on Form 10-K (No.
0-15994) for the year ended January 31, 1995, and incorporated
herein by reference.)
4.28 Letter Amendment dated as of May 15, 1995 to Note Purchase
Agreement dated August 31, 1989, among registrant, Northwestern
Mutual Life Insurance Company and the other parties listed in
Appendix I thereto (Included as an exhibit to the Registrant's
Annual Report on Form 10-K (No. 0-15994) for the year ended
January 31, 1995, and incorporated herein by reference.)
4.29 Amendment dated April 27, 1995, to Note Purchase Agreement dated
as of July 2, 1991, between registrant and Olympus Private
Placement Fund, L.P. (Included as an exhibit to the Registrant's
Annual Report on Form 10-K (No. 0-15994) for the year ended
January 31, 1995, and incorporated herein by reference.)
4.30 Amendment No. 5 dated as of May 31, 1995 to Second Amended and
Restated Credit Agreement dated July 29, 1994.
4.31 Letter Amendment dated as of May 31, 1995 to Note Purchase
Agreement dated August 31, 1989, among registrant, Northwestern
Mutual Life Insurance Company and the other parties listed in
Appendix I thereto.
4.32 Amendment dated May 25, 1995, to Note Purchase Agreement dated as
of July 2, 1991, between registrant and Olympus Private Placement
Fund, L.P.
4.33 Waiver agreement dated June 9, 1995 under Lease Receivables
Purchase and Contribution Agreement dated as of October 7, 1994,
between LDI Lease Receivables Funding Corp. and Registrant.
</TABLE>
- 17 -
<PAGE> 18
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit
- ----------- ----------------------
<S> <C>
4.34 Amendment No. 6 dated as of June 15, 1995 to Second Amended
and Restated Credit Agreement dated July 29, 1994.
4.35 Letter Amendment dated as of June 15, 1995 to Note Purchase
Agreement dated August 31, 1989, among registant, Northwestern
Mutual Life Insurance Company and the other parties listed in
Appendix I thereto.
10.01 1995 Non-Employee Directors' Stock Option Plan (Included as an
exhibit to the Registrant's Annual Report on Form 10-K (No.
0-15994) for the year ended January 31, 1995, and incorporated
herein by reference.)
10.02 Amended and Restated Employee Stock Option Plan (Included as an
exhibit to the Registrant's Annual Report on Form 10-K (No.
0-15994) for the year ended January 31, 1995, and incorporated
herein by reference.)
11.01 Computation of Earnings Per Share for the quarter ended April 30,
1995.
27.01 Financial Data Schedules as required under the Securities &
Exchange Commission EDGAR rule release effective for EDGAR
filings submitted on or after September 1, 1994.
</TABLE>
(b) REPORTS ON FORM 8-K. On March 22, 1995, the Registrant filed a report
on Form 8-K with respect to certain special charges to be recorded as of
January 31, 1995.
- 18 -
<PAGE> 19
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LDI CORPORATION
Date: June 14, 1995 By: /s/ Frank G. Skedel
--------------------
Frank G. Skedel, Executive Vice President,
Chief Financial Officer, Treasurer and
Secretary
- 19 -
<PAGE> 1
EXHIBIT 4.30
AMENDMENT NO. 5
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT,
WAIVER, CONSENT OF INTERCREDITOR LENDERS AND
AMENDMENT NO. 3 TO INTERCREDITOR AGREEMENT
THIS AMENDMENT NO. 5 TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT, WAIVER, CONSENT OF INTERCREDITOR LENDERS AND AMENDMENT NO. 3 TO
INTERCREDITOR AGREEMENT (this "Agreement"), is made as of this 31st day of May,
1995, among LDI CORPORATION, a Delaware corporation ("Borrower"), the various
financial institutions listed on the signature pages hereof (collectively, the
"Intercreditor Lenders"), and SOCIETY NATIONAL BANK (successor collateral agent
to Bank of America Illinois), as collateral agent (the "Collateral Agent"),
WITNESSETH:
WHEREAS, Borrower has entered into that certain Second Amended
and Restated Credit Agreement, dated as of July 29, 1994 (as amended by that
certain Consent, Waiver and Amendment No. 1 to Second Amended and Restated
Credit Agreement, Consent and Waiver with Respect to Note Purchase Agreement,
and Consent and Waiver of Intercreditor Lenders, dated as of January 20, 1995,
and as further amended by that certain Amendment No. 2 to Second Amended and
Restated Credit Agreement, and Consent of Intercreditor Lenders, dated as of
March 10, 1995, and as further amended by that certain Amendment No. 3 to Second
Amended and Restated Credit Agreement, Waiver, Consent of Intercreditor Lenders
and Amendment No. 1 to Intercreditor Agreement, dated as of April 30, 1995, and
as further amended by that certain Amendment No. 4 to Second Amended and
Restated Credit Agreement, Waiver, Consent of Intercreditor Lenders and
Amendment No. 2 to Intercreditor Agreement, dated as of May 15, 1995, the "Bank
Credit Agreement"), with the various financial institutions listed on the
signature pages thereto (the "Credit Agreement Banks"), pursuant to which the
Credit Agreement Banks have made certain financial accommodations available to
Borrower;
WHEREAS, Borrower has entered into that certain Note Purchase
Agreement, dated as of August 1, 1989 (as amended, the "1995 Note Purchase
Agreement"), with Northwestern National Life Insurance Company, Northern Life
Insurance Company, Confederation Life Insurance Company and Beneficial Standard
Life Insurance Company (such financial institutions being collectively referred
to as the "1995 Noteholders"), pursuant to which the 1995 Noteholders have made
certain financial accommodations available to Borrower;
WHEREAS, Borrower has executed and delivered that certain
Promissory Note, dated as of July 1, 1993, in favor of National Westminster Bank
USA, in the original principal amount of $20,000,000 (as amended, the "Natwest
Note");
<PAGE> 2
WHEREAS, Borrower has executed and delivered that certain
Amended and Restated Security Agreement, dated as of July 29, 1994 (the
"Security Agreement"), in favor of the Collateral Agent, pursuant to which
Borrower (a) ratified and confirmed the grant of the security interest to the
Existing Lenders (as defined in the Security Agreement) under the Existing
Security Agreement (as defined in the Security Agreement) and (b) granted a
continuing security interest to the Collateral Agent, for the benefit of the
Collateral Agent and each of the Co-Agents (as defined in the Security
Agreement) and for the ratable benefit of the Intercreditor Lenders, in and to
the Collateral (as defined in the Security Agreement), all as security for
Borrower's obligations under the Bank Credit Agreement, the 1995 Note Purchase
Agreement and the Natwest Note;
WHEREAS, in connection with the Bank Credit Agreement, the
1995 Note Purchase Agreement, the Natwest Note and the Security Agreement,
Borrower, the Intercreditor Lenders and the Collateral Agent entered into that
certain Intercreditor Agreement, dated as of July 29, 1994, as amended by that
certain Amendment No. 3 to Second Amended and Restated Credit Agreement, Waiver,
Consent of Intercreditor Lenders and Amendment No. 1 to Intercreditor Agreement,
dated as of April 30, 1995, and as further amended by that certain Amendment No.
4 to Second Amended and Restated Credit Agreement, Waiver, Consent of
Intercreditor Lenders and Amendment No. 2 to Intercreditor Agreement, dated as
of May 15, 1995 (the "Intercreditor Agreement");
WHEREAS, Borrower has requested that the Credit Agreement
Banks amend the Bank Credit Agreement as set forth in this Agreement; and
WHEREAS, the Credit Agreement Banks are willing to amend the
Bank Credit Agreement upon the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
SECTION 1. AMENDMENTS TO AND WAIVERS OF CERTAIN
PROVISIONS UNDER THE BANK CREDIT AGREEMENT.
1.1 Amendment to Section 1.1. The Credit Agreement Banks and
Borrower hereby agree that Section 1.1 of the Bank Credit Agreement shall be
amended by deleting the definition of "Expiration Date" in its entirety and
substituting the following new definition of "Expiration Date" in lieu thereof:
- 2 -
<PAGE> 3
"Expiration Date" means June 15, 1995, or such other
date as may from time to time be agreed upon by the Borrower
and the Banks.
1.2 Amendment to Annex A. The Credit Agreement Banks and the
Borrower hereby agree that Annex A to the Bank Credit Agreement shall be amended
by deleting Annex A in its entirety and substituting the new Annex A which is
attached hereto as Exhibit A, and incorporated herein by reference.
1.3 Waiver of Section 7.2.4(c) and Section 7.2.4(d). The
Credit Agreement Banks hereby waive compliance by Borrower with Section 7.2.4(c)
and Section 7.2.4(d) of the Bank Credit Agreement commencing on the date of this
Agreement and ending on the Expiration Date.
SECTION 2. CONSENT AND DIRECTION OF THE INTERCREDITOR
LENDERS, AMENDMENT TO INTERCREDITOR AGREEMENT.
2.1 Consent and Direction of the Intercreditor Lenders.
Subject to the terms and the conditions set forth in this Agreement, the
Intercreditor Lenders hereby consent to the terms and provisions of Section 1 of
this Agreement; provided, however, that each Intercreditor Lender's Esposure
Percentage, as defined in the Intercreditor Agreement, shall not be affected by
this Agreement.
2.2 Amendment to Schedule VII to Intercreditor Agreement. The
Intercreditor Lenders and the Borrower hereby agree that Schedule VII to the
Intercreditor Agreement shall be amended by deleting the last page of Schedule
VII to the Intercreditor Agreement and substituting the new last page of
Schedule VII which is attached hereto as Exhibit B, and incorporated herein by
reference.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS.
In addition to all of the other conditions and agreements set
forth herein, the effectiveness of the waiver set forth in this Agreement, and
the amendments set forth in Sections 1.1, 1.2 and 2.2 of this Agreement, is
subject to the following conditions precedent:
3.1 Acknowledgment of LDI of Ohio, Inc.. The Intercreditor
Lenders shall have received an original of the attached Acknowledgment of LDI of
Ohio, Inc. ("Guarantor"), executed and delivered by a duly authorized officer of
Guarantor.
- 3 -
<PAGE> 4
3.2 Extension of and Waiver of provisions of 1995 Note
Purchase Agreement. The Intercreditor Lenders shall have received evidence in
form and substance satisfactory to the Intercreditor Lenders of an extension of
the terms of the 1995 Note Purchase Agreement such that, except for the payments
to each of the 1995 Noteholders set forth on Exhibit C hereto, no payments of
principal or interest will be required to be made by Borrower in connection
therewith during the period beginning April 1, 1995, and ending June 15, 1995,
and a waiver of all then existing defaults under the 1995 Note Purchase
Agreement.
SECTION 4. MISCELLANEOUS.
4.1 Other Terms With Respect to the Waivers and Consents. The
effectiveness of the provisions of Section 1.1, Section 1.2, Section 1.3,
Section 2.1 and Section 2.2 hereof shall also be subject to the condition that,
in all other respects, Borrower, as of the date hereof, shall not have violated
any warranties, covenants, agreements or provisions or otherwise suffered to
occur any Default or Event of Default (as such terms are defined in the Bank
Credit Agreement) under the Bank Credit Agreement, or violated any warranties,
covenants, agreements or provisions, or otherwise suffered to occur any Event of
Default (as defined in the 1995 Note Purchase Agreement) under the 1995 Note
Purchase Agreement, or violated any warranties, covenants, agreements or
provisions, or otherwise suffered to occur any Default or Event of Default (as
such terms are defined in the Security Agreement) under the Security Agreement.
The waiver given as set forth in Section 1.3 hereof shall not extend to
prejudice any rights and remedies which the Credit Agreement Banks, the 1995
Noteholders or the Intercreditor Lenders may have in respect of any other
violations of any of the terms and provisions of the Bank Credit Agreement, the
1995 Note Purchase Agreement or the Intercreditor Agreement, as the case may be.
4.2 Bank Credit Agreement, the Security Agreement and 1995
Note Purchase Agreement. The execution of this Agreement by Borrower shall serve
as an acknowledgment that (a) the waivers and consents set forth herein shall
not affect the continued legality, validity and binding effect of the Bank
Credit Agreement, as previously amended and as further amended as set forth
herein, the Security Agreement and the 1995 Note Purchase Agreement, and (b) the
Bank Credit Agreement, as previously and as further amended as set forth herein,
the Security Agreement and the 1995 Note Purchase Agreement remain in full force
and effect and remain the valid and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms. Borrower hereby
ratifies and confirms the Bank Credit Agreement, as previously amended and as
further amended as set forth herein, the Security Agreement and the 1995 Note
Purchase Agreement.
- 4 -
<PAGE> 5
4.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio, without regard to
principles of conflict of law.
4.4 Severability. In the event any provision of this Agreement
should be invalid, the validity of the other provisions hereof shall not be
affected thereby.
4.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which, when taken together, shall constitute but one
and the same agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as a sealed instrument as of the date first set forth above.
<TABLE>
<CAPTION>
LDI CORPORATION, Borrower SOCIETY NATIONAL BANK, as
Collateral Agent
<S> <C>
By:________________________________________________
By:___________________________________________ Title:_____________________________________________
Title:________________________________________
BANK OF AMERICA ILLINOIS NATIONAL CITY BANK,
(successor in interest to Intercreditor Lender and
Continental Bank N.A.), Credit Agreement Bank
Intercreditor Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
SOCIETY NATIONAL BANK, NORTHWESTERN NATIONAL LIFE
Intercreditor Lender and INSURANCE COMPANY,
Credit Agreement Bank Intercreditor Lender and
1995 Noteholder
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
CONFEDERATION LIFE INSUR- BENEFICIAL STANDARD LIFE
ANCE COMPANY (U.S) IN REHA- INSURANCE COMPANY,
BILITATION, Intercreditor Intercreditor Lender and
Lender and 1995 Noteholder 1995 Noteholder
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
<S> <C>
COMERICA BANK, Intercreditor Lender and Credit FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Agreement Bank Intercreditor Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
THE DAIWA BANK, LIMITED, THE FIFTH THIRD BANK, Intercreditor Lender and
Acting through its Chicago Credit Agreement Bank
Branch, Intercreditor Lender and Credit Agreement
Bank By:________________________________________________
Title:_____________________________________________
By:____________________________________________
Title:_________________________________________ And
by:________________________________________________
Title:_____________________________________________
STAR BANK, NATIONAL ASSOCIATION, Intercreditor FIRST NATIONAL BANK OF OHIO, Intercreditor Lender
Lender and Credit Agreement Bank and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
MICHIGAN NATIONAL BANK, Intercreditor Lender and THE BANK OF TOKYO TRUST COMPANY, Intercreditor
Credit Agreement Bank Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
FIRST BANK NATIONAL ASSOCIATION, Intercreditor NATIONAL WESTMINSTER BANK, USA, Intercreditor Lender
Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
NORTHERN LIFE INSURANCE COMPANY, Intercreditor
Lender and 1995 Noteholder
By:____________________________________________
Title:_________________________________________
</TABLE>
- 6 -
<PAGE> 7
EXHIBIT A
ANNEX A
<TABLE>
<CAPTION>
===============================================================================================================
Commitment
Period
Total Expiration
Commitment Percentage Date
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NATIONAL CITY BANK $ 13,622,040.21 14.1701% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
SOCIETY NATIONAL BANK $ 13,622,040.21 14.1701% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
CONTINENTAL BANK N.A. $ 12,648,989.27 13.1579% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
COMERICA BANK $ 10,897,555.26 11.3360% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
FIRST UNION BANK $ 7,589,355.11 7.8947% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
THE DAIWA BANK, LIMITED $ 5,448,777.63 5.6680% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
THE FIFTH THIRD BANK $ 5,448,777.63 5.6680% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
STAR BANK, NATIONAL ASSOCIATION $ 5,448,777.63 5.6680% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
FIRST NATIONAL BANK OF OHIO $ 5,448,777.63 5.6680% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
MICHIGAN NATIONAL BANK $ 5,448,777.63 5.6680% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
THE BANK OF TOKYO TRUST COMPANY $ 5,448,777.63 5.6680% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
FIRST BANK NATIONAL ASSOCIATION $ 5,059,634.16 5.2632% 6/15/95
- ---------------------------------------------------------------------------------------------------------------
TOTAL $ 96,132,280.00 100.0000%
===============================================================================================================
</TABLE>
<PAGE> 8
EXHIBIT B
SEE ATTACHED LAST PAGE OF
SCHEDULE VII TO INTERCREDITOR AGREEMENT
<PAGE> 9
<TABLE>
<CAPTION>
==================================================================================================================
Scheduled
Payment
Bank At
6/15/95* Balance % of Collateral
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
National City Bank 13.3876% $ 13,622,040.21 $ 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Society 13.3876% $ 13,622,040.21 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Continental 12.4314% $ 12,648,989.27 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Comerica 10.7101% $ 10,897,555.26 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
First Union 7.4588% $ 7,589,355.11 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Daiwa Ltd 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Fifth Third Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
First National Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Michigan National Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Star Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Bank of Tokyo 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
First Bank, N.A 4.9725% $ 5,059,634.16 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Northwestern National Life 2.4847% $ 2,528,211.43 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Northern Life 1.3804% $ 1,404,573.21 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Confederation Life 0.8282% $ 842,703.23 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Beneficial Standard Life 0.8282% $ 842,703.23 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Northwestern National Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
North Atlantic Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Confederation Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Minnesota Mutual Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Farm Bureau Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
FB Annuity 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Farm Bureau Mutual Ins. Co. of Michigan 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
100.0000% $ 101,750,471.10 $ 0.00 100.0000%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Revolver Only Payment $ 96,132,280
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
*For purposes of calculating Exposure Percentage as of June 15, 1995 only.
<PAGE> 10
EHXIBIT C
<TABLE>
<CAPTION>
PERMITTED PRINCIPAL
--------------------
1995 NOTEHOLDER EQUALIZATION PAYMENT
- --------------- --------------------
<S> <C>
NORTHWESTERN NATIONAL LIFE INSURANCE
COMPANY $233,247.04
NORTHERN LIFE INSURANCE COMPANY $129,570.38
CONFEDERATION LIFE INSURANCE
COMPANY (U.S.) IN REHABILITATION $ 77,782.93
BENEFICIAL STANDARD LIFE INSURANCE
COMPANY $ 77,782.93
-----------
TOTAL: $518,383.28
</TABLE>
<PAGE> 11
ACKNOWLEDGMENT OF LDI OF OHIO, INC.
The undersigned, LDI of Ohio, Inc., hereby acknowledges and
consents to the terms and provisions set forth in the foregoing Amendment No. 5
to Second Amended and Restated Credit Agreement, Waiver, Consent of
Intercreditor Lenders and Amendment No. 3 to Intercreditor Agreement
("Agreement"). The undersigned represents and warrants to the Intercreditor
Lenders (as defined in the foregoing Agreement) that (a) the Guaranty of Payment
of Debt, executed and delivered by the undersigned, dated July 29, 1994, and (b)
the Amended and Restated Security Agreement, dated as of July 29, 1994 remain
the valid and binding obligations of the undersigned, enforceable against it in
accordance with their respective terms.
LDI OF OHIO, INC.
By:______________________________________
Its:_____________________________________
Dated: May ___, 1995
<PAGE> 1
EXHIBIT 4.31
LETTER AMENDMENT
DATED AS OF MAY 31, 1995
TO THE PARTIES NAMED IN APPENDIX I HERETO:
Reference is made to the Note Purchase Agreement dated as of
August 1, 1989 (as from time to time amended, the "Note Purchase Agreement")
pursuant to which Northwestern National Life Insurance Company, Northern Life
Insurance Company, Confederation Life Insurance Company (US) In Rehabilitation,
and Beneficial Standard Life Insurance Company (collectively, the "Noteholders")
hold the 9.96% Senior Notes of LDI Corporation (the "Company") dated August 11,
1989 in the aggregate original principal amount of $20,000,000 (the "Notes").
The Noteholders are the registered holders of 100% of the outstanding principal
amount of the Notes as refiected in the Note Register required to be maintained
by the Company pursuant to paragraph 8 of the Note Purchase Agreement. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Note Purchase Agreement.
1. Payments of Principal on the Notes. The Company shall, on
the date hereof, make a principal payment on the Notes in the amount of
$518,383.28. The balance of the principal amount of the Notes in the amount of
$5,618,191.10 shall be due and payable on June 15, 1995. Interest on the Notes
shall continue to be payable on the 10th day of each month.
2. Conditions Precedent. The effectiveness of the foregoing
amendments to the Note Purchase Agreement and Notes shall be subject to the
satisfaction of the following conditions:
(a) The Noteholders shall have received an Acknowledgment
executed by LDI Ohio in the form of Exhibit A.
(b) The expiration date of the Bank Credit Agreement shall
have been extended until June 15, 1995.
3. Miscellaneous. Except as specifically amended hereby, all
terms and provisions of the Note Purchase Agreement and all other documents and
instruments related thereto shall remain in full force and effect with no other
modification or waiver. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
<PAGE> 2
If you agree to amending the Note Purchase Agreement in the
manner set forth above, please so indicate by executing the form of
acknowledgment set forth below. This Amendment shall then take effect as of
the date hereof upon satisfaction of the conditions set forth in
paragraph 2 hereof.
Very Truly Yours,
LDI CORPORATION
By______________________________
Its___________________________
Agreed to and accepted as of
the date first-above mentioned.
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
By______________________________
Its___________________________
NORTHERN LIFE INSURANCE COMPANY
By______________________________
Its___________________________
-2-
<PAGE> 3
CONFEDERATION LIFE INSURANCE
COMPANY (U.S.) IN REHABILITATION
By
-------------------------------
Its
-----------------------------
BENEFICIAL STANDARD LIFE INSURANCE
COMPANY
By: Conseco Capital Management, Inc.
acting as investment advisor
By
--------------------------------
Its
-----------------------------
-3-
<PAGE> 4
APPENDIX I
NOTEHOLDERS
Name and Notice Address
Northwestern National Life
Insurance Company
c/o Washington Square Capital, Inc.
100 Washington Square
Suite 800
Minneapolis, Minnesota 55401-2147
Northern Life Insurance Company
c/o Washington Square Capital, Inc.
100 Washington Square
Suite 800
Minneapolis, Minnesota 55401-2147
Confederation Life Insurance Company
(U.S.) In Rehabilitation
260 Interstate North
Atlanta, Georgia 30339
Attn: Manager, Private Placements
Beneficial Standard Life
Insurance Company
c/o Washington Square Capital, Inc.
100 Washington Square
Suite 800
Minneapolis, Minnesota 55401-2147
<PAGE> 5
EXHIBIT A
ACKNOWLEDGMENT OF LDI OF OHIO, INC.
The undersigned, LDI of Ohio, Inc., hereby acknowledges and consents
to the terms and provisions set forth in the foregoing Letter Amendment dated as
of May 31, 1995. The undersigned represents and warrants to the Noteholders (as
defined in the foregoing Letter Amendment) that (a) the Guaranty of Payment of
Debt, executed and delivered by the undersigned, dated July 29, 1994, and (b)
the Amended and Restated Security Agreement, dated as of July 29, 1994 remain
the valid and binding obligations of the undersigned, enforceable against it in
accordance with their respective terms.
LDI OF OHIO, INC.
By_________________________
Its______________________
Dated: May 31, 1995
<PAGE> 1
EXHIBIT 4.32
May 25, 1995
Olympus Private Placement Fund, L.P.
Metro Center
One Station Place
Stamford, Connecticut 06902
Ladies and Gentlemen:
Reference is made to the letter agreement dated April 27, 1995 (the
"Letter 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. Inasmuch as the
Company has not finalized the refinancing of its senior debt or determined the
defnitive financial covenants that will appear in the agreements relating to
such senior debt, the Company and the Purchaser hereby agree that paragraph 5 of
the Letter Agreement is amended and restated to read in its entirety as follows:
5. If a definitive amendment of the Agreement as referred to
in the second paragraph above has not been executed and delivered by
the Company and the Purchaser on or before June 30, 1995, then on July
1, 1995, (i) the waiver set forth in paragraph 1 above shall expire and
be of no further force and effect and (ii) the amendment to Section 5F
set forth in paragraph 2 above shall be void and of no further force
and effect, and the provisions of Section 5F shall be reinstated as in
effect immediately prior to the effectiveness of this letter agreement.
Please indicate your agreement with the foregoing by executing this
letter agreement in the space provided below and returning a signed copy to me.
Sincerely,
LDI CORPORATION
By: Frank G. Skedel
Executive Vice President and
Chief Financial Officer
ACCEPTED AND AGREED:
OLYMPUS PRIVATE PLACEMENT FUND, L.P.
By: OGP Partners, L.P.
Its General Partner
By: ___________________________________________
Title: __________________________________________
<PAGE> 1
EXHIBIT 4.33
June 9, 1995
CXC Incorporated
450 Mamaronek Avenue
Harrison, New York 10528
Citicorp North America, Inc.,
as Agent
200 South Wacker Drive
Chicago, Illinois 60606
Ladies and Gentlemen:
Reference is made to the Lease Receivables Purchase and Contribution
Agreement dated as of October 7, 1994 (the "Contribution Agreement;" capitalized
terms used herein and not otherwise defined have the meanings set forth in the
Contribution Agreement) between LDI Lease Receivables Funding Corp. (the
"Transferor") and LDI Corporation (the "Originator") and to the Lease
Receivables Transfer Agreement dated as of October 7, 1994 (the "Transfer
Agreement") among the Transferor, CXC Incorporated (the "Transferee") and
Citicorp North America, Inc., as Agent (the "Agent"). The Originator requests
that certain provisions of the Contribution Agreement be waived as set forth
below and that, in accordance with Section 5.03(1) of the Transfer Agreement,
the Transferee and the Agent consent to such waiver.
1. The provisions of Sections 5.04(b)(i), 5.04(b)(iii) and 5.04(b)(iv)
of the Contribution Agreement, relating to Consolidated Tangible Net Worth,
Income Available for Total Interest Expense and Income Available for Recourse
Interest Expense, respectively, are hereby waived as at and for the fiscal
quarter ended April 30, 1995.
This waiver shall become effective when it has been signed by the
Transferor, the Transferee and the Agent. This waiver may be executed in
counterparts, each of which shall be an original and all of which together shall
constitute one instrument.
Please indicate your agreement with the foregoing by executing this
letter in the space provided below and returning a signed copy.
Sincerely,
LDI CORPORATION
By: Frank G. Skedel
Executive Vice President
and Chief Financial Officer
<PAGE> 2
CXC Incorporated
Citicorp North America, Inc.
June 9, 1995
Page 2
ACCEPTED AND AGREED:
LDI LEASE RECEIVABLES FUNDING CORP.
By: _____________________________________________
Title: __________________________________________
CXC INCORPORATED
By: Citicorp North America, Inc.,
as Attorney-in-Fact
By: _____________________________________________
Title: __________________________________________
CITICORP NORTH AMERICA, INC.,
as Agent
By: _____________________________________________
Title: __________________________________________
ACKNOWLEDGED:
CAPITAL MARKETS ASSURANCE CORPORATION
By: _____________________________________________
Title: __________________________________________
<PAGE> 1
EXHIBIT 4.34
AMENDMENT NO. 6
TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT,
WAIVER, CONSENT OF INTERCREDITOR LENDERS AND
AMENDMENT NO. 4 TO INTERCREDITOR AGREEMENT
THIS AMENDMENT NO. 6 TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT, WAIVER, CONSENT OF INTERCREDITOR LENDERS AND AMENDMENT NO. 4 TO
INTERCREDITOR AGREEMENT (this "Agreement"), is made as of this 15th day of June,
1995, among LDI CORPORATION, a Delaware corporation ("Borrower"), the various
financial institutions listed on the signature pages hereof (collectively, the
"Intercreditor Lenders"), and SOCIETY NATIONAL BANK (successor collateral agent
to Bank of America Illinois), as collateral agent (the "Collateral Agent"),
WITNESSETH:
WHEREAS, Borrower has entered into that certain Second Amended
and Restated Credit Agreement, dated as of July 29, 1994 (as amended by that
certain Consent, Waiver and Amendment No. 1 to Second Amended and Restated
Credit Agreement, Consent and Waiver with Respect to Note Purchase Agreement,
and Consent and Waiver of Intercreditor Lenders, dated as of January 20, 1995,
and as further amended by that certain Amendment No. 2 to Second Amended and
Restated Credit Agreement, and Consent of Intercreditor Lenders, dated as of
March 10, 1995, and as further amended by that certain Amendment No. 3 to Second
Amended and Restated Credit Agreement, Waiver, Consent of Intercreditor Lenders
and Amendment No. 1 to Intercreditor Agreement, dated as of April 30, 1995, and
as further amended by that certain Amendment No. 4 to Second Amended and
Restated Credit Agreement, Waiver, Consent of Intercreditor Lenders and
Amendment No. 2 to Intercreditor Agreement, dated as of May 15, 1995, and as
further amended by that certain Amendment No. 5 to Second Amended and
Restated Credit Agreement, Waiver, Consent of Intercreditor Lenders and
Amendment No. 3 to Intercreditor Agreement, dated as of May 31, 1995, the "Bank
Credit Agreement"), with the various financial institutions listed on the
signature pages thereto (the "Credit Agreement Banks"), pursuant to which the
Credit Agreement Banks have made certain financial accommodations available to
Borrower;
WHEREAS, Borrower has entered into that certain Note Purchase
Agreement, dated as of August 1, 1989 (as amended, the "1995 Note Purchase
Agreement"), with Northwestern National Life Insurance Company, Northern Life
Insurance Company, Confederation Life Insurance Company and Beneficial Standard
Life Insurance Company (such financial institutions being collectively referred
to as the "1995 Noteholders"), pursuant to which the 1995 Noteholders have made
certain financial accommodations available to Borrower;
<PAGE> 2
WHEREAS, Borrower has executed and delivered that certain Amended and
Restated Security Agreement, dated as of July 29, 1994 (the "Security
Agreement"), in favor of the Collateral Agent, pursuant to which Borrower (a)
ratified and confirmed the grant of the security interest to the Existing
Lenders (as defined in the Security Agreement) under the Existing Security
Agreement (as defined in the Security Agreement) and (b) granted a continuing
security interest to the Collateral Agent, for the benefit of the Collateral
Agent and each of the Co-Agents (as defined in the Security Agreement) and for
the ratable benefit of the Intercreditor Lenders, in and to the Collateral (as
defined in the Security Agreement), all as security for Borrower's obligations
under the Bank Credit Agreement and the 1995 Note Purchase Agreement;
WHEREAS, in connection with the Bank Credit Agreement, the
1995 Note Purchase Agreement and the Security Agreement, Borrower, the
Intercreditor Lenders and the Collateral Agent entered into that certain
Intercreditor Agreement, dated as of July 29, 1994, as amended by that certain
Amendment No. 3 to Second Amended and Restated Credit Agreement, Waiver,
Consent of Intercreditor Lenders and Amendment No. 1 to Intercreditor
Agreement, dated as of April 30, 1995, and as further amended by that certain
Amendment No. 4 to Second Amended and Restated Credit Agreement, Waiver,
Consent of Intercreditor Lenders and Amendment No. 2 to Intercreditor Agreement,
dated as of May 15, 1995, and as further amended by that certain Amendment No. 5
to Second Amended and Restated Credit Agreement, Waiver, Consent of
Intercreditor Lenders and Amendment No. 3 to Intercreditor Agreement, dated
as of May 31, 1995 (the "Intercreditor Agreement");
WHEREAS, Borrower has requested that the Credit Agreement
Banks amend the Bank Credit Agreement as set forth in this Agreement; and
WHEREAS, the Credit Agreement Banks are willing to amend the
Bank Credit Agreement upon the terms and conditions hereof;
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto do
hereby agree as follows:
SECTION 1. AMENDMENTS TO AND WAIVERS OF CERTAIN
PROVISIONS UNDER THE BANK CREDIT AGREEMENT.
1.1 Amendment to Section 1.1. The Credit Agreement Banks and
Borrower hereby agree that Section 1.1 of the Bank Credit Agreement shall be
amended by deleting the definition of "Expiration Date" in its entirety and
substituting the following new definition of "Expiration Date" in lieu thereof:
- 2 -
<PAGE> 3
"Expiration Date" means June 30, 1995, or such other
date as may from time to time be agreed upon by the Borrower
and the Banks.
1.2 Amendment to Annex A. The Credit Agreement Banks and the
Borrower hereby agree that Annex A to the Bank Credit Agreement shall be amended
by deleting Annex A in its entirety and substituting the new Annex A which is
attached hereto as Exhibit A, and incorporated herein by reference.
1.3 Waiver of Section 7.2.4(c) and Section 7.2.4(d). The
Credit Agreement Banks hereby waive compliance by Borrower with Section 7.2.4(c)
and Section 7.2.4(d) of the Bank Credit Agreement commencing on the date of this
Agreement and ending on the Expiration Date.
SECTION 2. CONSENT AND DIRECTION OF THE INTERCREDITOR
LENDERS, AMENDMENT TO INTERCREDITOR AGREEMENT.
2.1 Consent and Direction of the Intercreditor Lenders.
Subject to the terms and the conditions set forth in this Agreement, the
Intercreditor Lenders hereby consent to the terms and provisions of Section 1 of
this Agreement; provided, however, that each Intercreditor Lender's Esposure
Percentage, as defined in the Intercreditor Agreement, shall not be affected by
this Agreement.
2.2 Amendment to Schedule VII to Intercreditor Agreement. The
Intercreditor Lenders and the Borrower hereby agree that Schedule VII to the
Intercreditor Agreement shall be amended by deleting the last page of Schedule
VII to the Intercreditor Agreement and substituting the new last page of
Schedule VII which is attached hereto as Exhibit B, and incorporated herein by
reference.
SECTION 3. CONDITIONS PRECEDENT TO EFFECTIVENESS.
In addition to all of the other conditions and agreements set
forth herein, the effectiveness of the waiver set forth in this Agreement, and
the amendments set forth in Sections 1.1, 1.2 and 2.2 of this Agreement, is
subject to the following conditions precedent:
3.1 Acknowledgment of LDI of Ohio, Inc.. The Intercreditor
Lenders shall have received an original of the attached Acknowledgment of LDI of
Ohio, Inc. ("Guarantor"), executed and delivered by a duly authorized officer of
Guarantor.
- 3 -
<PAGE> 4
3.2 Extension of and Waiver of provisions of 1995 Note
Purchase Agreement. The Intercreditor Lenders shall have received evidence in
form and substance satisfactory to the Intercreditor Lenders of an extension of
the terms of the 1995 Note Purchase Agreement such that no payments of
principal or interest will be required to be made by Borrower in connection
therewith during the period beginning June 1, 1995, and ending June 30, 1995,
and a waiver of all then existing defaults under the 1995 Note Purchase
Agreement.
SECTION 4. MISCELLANEOUS.
4.1 Other Terms With Respect to the Waivers and Consents. The
effectiveness of the provisions of Section 1.1, Section 1.2, Section 1.3,
Section 2.1 and Section 2.2 hereof shall also be subject to the condition that,
in all other respects, Borrower, as of the date hereof, shall not have violated
any warranties, covenants, agreements or provisions or otherwise suffered to
occur any Default or Event of Default (as such terms are defined in the Bank
Credit Agreement) under the Bank Credit Agreement, or violated any warranties,
covenants, agreements or provisions, or otherwise suffered to occur any Event of
Default (as defined in the 1995 Note Purchase Agreement) under the 1995 Note
Purchase Agreement, or violated any warranties, covenants, agreements or
provisions, or otherwise suffered to occur any Default or Event of Default (as
such terms are defined in the Security Agreement) under the Security Agreement.
The waiver given as set forth in Section 1.3 hereof shall not extend to
prejudice any rights and remedies which the Credit Agreement Banks, the 1995
Noteholders or the Intercreditor Lenders may have in respect of any other
violations of any of the terms and provisions of the Bank Credit Agreement, the
1995 Note Purchase Agreement or the Intercreditor Agreement, as the case may be.
4.2 Bank Credit Agreement, the Security Agreement and 1995
Note Purchase Agreement. The execution of this Agreement by Borrower shall serve
as an acknowledgment that (a) the waivers and consents set forth herein shall
not affect the continued legality, validity and binding effect of the Bank
Credit Agreement, as previously amended and as further amended as set forth
herein, the Security Agreement and the 1995 Note Purchase Agreement, and (b) the
Bank Credit Agreement, as previously and as further amended as set forth herein,
the Security Agreement and the 1995 Note Purchase Agreement remain in full force
and effect and remain the valid and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms. Borrower hereby
ratifies and confirms the Bank Credit Agreement, as previously amended and as
further amended as set forth herein, the Security Agreement and the 1995 Note
Purchase Agreement.
- 4 -
<PAGE> 5
4.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio, without regard to
principles of conflict of law.
4.4 Severability. In the event any provision of this Agreement
should be invalid, the validity of the other provisions hereof shall not be
affected thereby.
4.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which, when taken together, shall constitute but one
and the same agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as a sealed instrument as of the date first set forth above.
<TABLE>
<CAPTION>
LDI CORPORATION, Borrower SOCIETY NATIONAL BANK, as
Collateral Agent
<S> <C>
By:________________________________________________
By:___________________________________________ Title:_____________________________________________
Title:________________________________________
BANK OF AMERICA ILLINOIS NATIONAL CITY BANK,
(successor in interest to Intercreditor Lender and
Continental Bank N.A.), Credit Agreement Bank
Intercreditor Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
SOCIETY NATIONAL BANK, NORTHWESTERN NATIONAL LIFE
Intercreditor Lender and INSURANCE COMPANY,
Credit Agreement Bank Intercreditor Lender and
1995 Noteholder
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
CONFEDERATION LIFE INSUR- BENEFICIAL STANDARD LIFE
ANCE COMPANY (U.S) IN REHA- INSURANCE COMPANY,
BILITATION, Intercreditor Intercreditor Lender and
Lender and 1995 Noteholder 1995 Noteholder
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
<S> <C>
COMERICA BANK, Intercreditor Lender and Credit FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
Agreement Bank Intercreditor Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
THE DAIWA BANK, LIMITED, THE FIFTH THIRD BANK, Intercreditor Lender and
Acting through its Chicago Credit Agreement Bank
Branch, Intercreditor Lender and Credit Agreement
Bank By:________________________________________________
Title:_____________________________________________
By:____________________________________________
Title:_________________________________________ And
by:________________________________________________
Title:_____________________________________________
STAR BANK, NATIONAL ASSOCIATION, Intercreditor FIRST NATIONAL BANK OF OHIO, Intercreditor Lender
Lender and Credit Agreement Bank and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
MICHIGAN NATIONAL BANK, Intercreditor Lender and THE BANK OF TOKYO TRUST COMPANY, Intercreditor
Credit Agreement Bank Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
FIRST BANK NATIONAL ASSOCIATION, Intercreditor NATIONAL WESTMINSTER BANK, USA, Intercreditor Lender
Lender and Credit Agreement Bank
By:____________________________________________ By:________________________________________________
Title:_________________________________________ Title:_____________________________________________
NORTHERN LIFE INSURANCE COMPANY, Intercreditor
Lender and 1995 Noteholder
By:____________________________________________
Title:_________________________________________
</TABLE>
- 6 -
<PAGE> 7
EXHIBIT A
ANNEX A
<TABLE>
<CAPTION>
===============================================================================================================
Commitment
Period
Total Expiration
Commitment Percentage Date
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NATIONAL CITY BANK $ 13,622,040.21 14.1701% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
SOCIETY NATIONAL BANK $ 13,622,040.21 14.1701% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
CONTINENTAL BANK N.A. $ 12,648,989.27 13.1579% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
COMERICA BANK $ 10,897,555.26 11.3360% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
FIRST UNION BANK $ 7,589,355.11 7.8947% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
THE DAIWA BANK, LIMITED $ 5,448,777.63 5.6680% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
THE FIFTH THIRD BANK $ 5,448,777.63 5.6680% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
STAR BANK, NATIONAL ASSOCIATION $ 5,448,777.63 5.6680% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
FIRST NATIONAL BANK OF OHIO $ 5,448,777.63 5.6680% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
MICHIGAN NATIONAL BANK $ 5,448,777.63 5.6680% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
THE BANK OF TOKYO TRUST COMPANY $ 5,448,777.63 5.6680% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
FIRST BANK NATIONAL ASSOCIATION $ 5,059,634.16 5.2632% 6/30/95
- ---------------------------------------------------------------------------------------------------------------
TOTAL $ 96,132,280.00 100.0000%
===============================================================================================================
</TABLE>
<PAGE> 8
EXHIBIT B
SEE ATTACHED LAST PAGE OF
SCHEDULE VII TO INTERCREDITOR AGREEMENT
<PAGE> 9
<TABLE>
<CAPTION>
==================================================================================================================
Scheduled
Payment
Bank At
6/30/95* Balance % of Collateral
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
National City Bank 13.3876% $ 13,622,040.21 $ 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Society 13.3876% $ 13,622,040.21 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Continental 12.4314% $ 12,648,989.27 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Comerica 10.7101% $ 10,897,555.26 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
First Union 7.4588% $ 7,589,355.11 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Daiwa Ltd 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Fifth Third Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
First National Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Michigan National Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Star Bank 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Bank of Tokyo 5.3550% $ 5,448,777.63 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
First Bank, N.A 4.9725% $ 5,059,634.16 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Northwestern National Life 2.4847% $ 2,528,211.43 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Northern Life 1.3804% $ 1,404,573.21 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Confederation Life 0.8282% $ 842,703.23 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Beneficial Standard Life 0.8282% $ 842,703.23 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Northwestern National Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
North Atlantic Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Confederation Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Minnesota Mutual Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Farm Bureau Life 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
FB Annuity 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
Farm Bureau Mutual Ins. Co. of Michigan 0.0000% $ 0.00 0.00 0.0000%
- ------------------------------------------------------------------------------------------------------------------
100.0000% $ 101,750,471.10 $ 0.00 100.0000%
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
Revolver Only Payment $ 96,132,280
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
*For purposes of calculating Exposure Percentage as of June 30, 1995 only.
<PAGE> 10
ACKNOWLEDGMENT OF LDI OF OHIO, INC.
The undersigned, LDI of Ohio, Inc., hereby acknowledges and
consents to the terms and provisions set forth in the foregoing Amendment No. 6
to Second Amended and Restated Credit Agreement, Waiver, Consent of
Intercreditor Lenders and Amendment No. 4 to Intercreditor Agreement
("Agreement"). The undersigned represents and warrants to the Intercreditor
Lenders (as defined in the foregoing Agreement) that (a) the Guaranty of Payment
of Debt, executed and delivered by the undersigned, dated July 29, 1994, and (b)
the Amended and Restated Security Agreement, dated as of July 29, 1994 remain
the valid and binding obligations of the undersigned, enforceable against it in
accordance with their respective terms.
LDI OF OHIO, INC.
By:______________________________________
Its:_____________________________________
Dated: June ___, 1995
<PAGE> 1
EXHIBIT 4.35
LETTER AMENDMENT
DATED AS OF JUNE 15, 1995
TO THE PARTIES NAMED IN APPENDIX I HERETO:
Reference is made to the Note Purchase Agreement dated as of
August 1, 1989 (as from time to time amended, the "Note Purchase Agreement")
pursuant to which Northwestern National Life Insurance Company, Northern Life
Insurance Company, Confederation Life Insurance Company (US) In Rehabilitation,
and Beneficial Standard Life Insurance Company (collectively, the "Noteholders")
hold the 9.96% Senior Notes of LDI Corporation (the "Company") dated August 11,
1989 in the aggregate original principal amount of $20,000,000 (the "Notes").
The Noteholders are the registered holders of 100% of the outstanding principal
amount of the Notes as refiected in the Note Register required to be maintained
by the Company pursuant to paragraph 8 of the Note Purchase Agreement. Unless
otherwise defined, capitalized terms used herein shall have the same meaning as
in the Note Purchase Agreement.
1. Payments of Principal on the Notes. The principal payment
on the Notes in the aggregate principal amount of $5,618,191.10 due on June
15, 1995 shall be deferred until June 30, 1995. Interest on the Notes shall
continue to be payable on the 10th day of each month.
2. Conditions Precedent. The effectiveness of the foregoing
amendments to the Note Purchase Agreement and Notes shall be subject to the
satisfaction of the following conditions:
(a) The Noteholders shall have received an Acknowledgment
executed by LDI Ohio in the form of Exhibit A.
(b) The expiration date of the Bank Credit Agreement shall
have been extended until June 30, 1995.
3. Miscellaneous. Except as specifically amended hereby, all
terms and provisions of the Note Purchase Agreement and all other documents and
instruments related thereto shall remain in full force and effect with no other
modification or waiver. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
<PAGE> 2
If you agree to amending the Note Purchase Agreement in the
manner set forth above, please so indicate by executing the form of
acknowledgment set forth below. This Amendment shall then take effect as of
the date hereof upon satisfaction of the conditions set forth in
paragraph 2 hereof.
Very Truly Yours,
LDI CORPORATION
By______________________________
Its___________________________
Agreed to and accepted as of
the date first-above mentioned.
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
By______________________________
Its___________________________
NORTHERN LIFE INSURANCE COMPANY
By______________________________
Its___________________________
-2-
<PAGE> 3
CONFEDERATION LIFE INSURANCE
COMPANY (U.S.) IN REHABILITATION
By
-------------------------------
Its
-----------------------------
BENEFICIAL STANDARD LIFE INSURANCE
COMPANY
By: Conseco Capital Management, Inc.
acting as investment advisor
By
--------------------------------
Its
-----------------------------
-3-
<PAGE> 4
APPENDIX I
NOTEHOLDERS
Name and Notice Address
Northwestern National Life
Insurance Company
c/o Washington Square Capital, Inc.
100 Washington Square
Suite 800
Minneapolis, Minnesota 55401-2147
Northern Life Insurance Company
c/o Washington Square Capital, Inc.
100 Washington Square
Suite 800
Minneapolis, Minnesota 55401-2147
Confederation Life Insurance Company
(U.S.) In Rehabilitation
260 Interstate North
Atlanta, Georgia 30339
Attn: Manager, Private Placements
Beneficial Standard Life
Insurance Company
c/o Washington Square Capital, Inc.
100 Washington Square
Suite 800
Minneapolis, Minnesota 55401-2147
<PAGE> 5
EXHIBIT A
ACKNOWLEDGMENT OF LDI OF OHIO, INC.
The undersigned, LDI of Ohio, Inc., hereby acknowledges and consents
to the terms and provisions set forth in the foregoing Letter Amendment dated as
of May 31, 1995. The undersigned represents and warrants to the Noteholders (as
defined in the foregoing Letter Amendment) that (a) the Guaranty of Payment of
Debt, executed and delivered by the undersigned, dated July 29, 1994, and (b)
the Amended and Restated Security Agreement, dated as of July 29, 1994 remain
the valid and binding obligations of the undersigned, enforceable against it in
accordance with their respective terms.
LDI OF OHIO, INC.
By_________________________
Its______________________
Dated: June 15, 1995
<PAGE> 1
EXHIBIT 11.01
LDI CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Amounts in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended April 30,
1995 1994
---------------------------
<S> <C> <C>
AVERAGE SHARES OUTSTANDING
1. Average common shares outstanding 6,727 6,727
2. Net additional shares outstanding assuming
stock options exercised and proceeds used to
purchase treasury stock (A) (A)
3. Dilutive shares contingently issuable upon
conversion of debentures or exercise of
warrants (See Note 7 of the Notes to
Consolidated Financial Statements) (A) (A)
4. Adjusted average common shares outstanding for
fully diluted computation 6,727 6,727
NET EARNINGS (LOSS)
5. Net earnings (loss) as reported in
statements of consolidated earnings $(299) $(837)
6. Decrease in interest expense and amortization
of debt issuance costs relating to the
subordinated debentures, net of income tax
benefit (A) (A)
7. Adjusted net earnings (loss) $(299) $(837)
EARNINGS (LOSS) PER SHARE
8. Net earnings (loss) per average common share
outstanding $(.04) $(.12)
9. Net earnings per common share on a fully
diluted basis (A) (A)
</TABLE>
(A) Antidilutive
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1995
<PERIOD-START> FEB-01-1995
<PERIOD-END> APR-30-1995
<CASH> 12,883
<SECURITIES> 0
<RECEIVABLES> 25,442
<ALLOWANCES> 4,024
<INVENTORY> 9,803
<CURRENT-ASSETS> 44,104
<PP&E> 20,840
<DEPRECIATION> 8,543
<TOTAL-ASSETS> 395,593
<CURRENT-LIABILITIES> 118,805
<BONDS> 225,476
<COMMON> 68
0
0
<OTHER-SE> 51,244
<TOTAL-LIABILITY-AND-EQUITY> 395,593
<SALES> 10,694
<TOTAL-REVENUES> 34,561
<CGS> 8,908
<TOTAL-COSTS> 21,790
<OTHER-EXPENSES> 5,386
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,883
<INCOME-PRETAX> (498)
<INCOME-TAX> (199)
<INCOME-CONTINUING> (299)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (299)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
