AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT
Exhibit 10-2
AMENDMENT NO. 6 TO
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 6 TO LOAN AND SECURITY AGREEMENT (this “Sixth Amendment”) dated as of
September 30, 2005 by and among Lexington Precision Corporation, a Delaware corporation
(“LPC”) and Lexington Rubber Group, Inc., a Delaware corporation (“LRG”, and
together with LPC, each, individually, a “Borrower” and collectively, “Borrowers”), the
lenders party to the Loan Agreement (as hereinafter defined) (each individually, a “Lender”
and collectively, “Lenders”) and Ableco Finance LLC, a Delaware limited liability company,
in its capacity as agent for Lenders (in such capacity, “Agent”).
WITNESSETH:
WHEREAS, Borrowers, Agent and Lenders have entered into financing arrangements pursuant to
which Lenders have made loans to Borrowers as set forth in the Loan and Security Agreement, dated
December 18, 2003, by and among Borrowers, Agent and Lenders (as heretofore amended or otherwise
modified, as amended hereby, and as the same may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the “Loan Agreement”) and the other
agreements, documents and instruments referred to therein or at any time executed and/or delivered
in connection therewith or related thereto, including this Sixth Amendment (all of the foregoing,
including the Loan Agreement, as the same now exist or may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the
“Financing Agreements”); and
WHEREAS, Borrowers have requested that Agent and Lenders agree to certain amendments to the
Loan Agreement and Agent and Lenders are willing to agree to the requested amendments, subject to
the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual conditions and agreements and covenants set
forth herein, and for other good and valuable consideration, the adequacy and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions.
1.1 Defined Terms. For purposes of this Sixth Amendment, unless otherwise defined
herein, all terms used herein, including, but not limited to, those terms used and/or defined in
the recitals above, shall have the respective meanings assigned to such terms in the Loan
Agreement.
1.2 Additional Definitions. As used herein, the following terms shall have the
respective meanings given to them below and the Loan Agreement shall be deemed and is hereby
amended to include, in addition and not in limitation, each of the following definitions:
(a) “Sixth Amendment” shall mean Amendment No. 6 to Loan and Security Agreement, dated as of
September 30, 2005, by and among the Borrowers, the Agent and the Lenders.
(b) “Sixth Amendment Effective Date” shall mean the date the Sixth Amendment becomes
effective.
SECTION 2. Amendments to the Loan Agreement.
2.1 Financial Covenants.
(a) Section 9.17 of the Loan Agreement is hereby amended in its entirety to read as follows:
“9.17 Leverage Ratio. Borrowers and their Subsidiaries, on a consolidated
basis, shall, not permit the ratio of consolidated secured Indebtedness (including
letters of credit) to consolidated EBITDA as of the end of each trailing twelve month
period of Borrowers and their Subsidiaries for which the last month ends on a date set
forth below to be greater than the applicable ratio set forth below:
| Leverage Ratio | Applicable Period | |
3.35:1.00
|
For the trailing twelve months ending December 31, 2003 | |
3.35:1.00
|
For the trailing twelve months ending January 31, 2004 | |
3.35:1.00
|
For the trailing twelve months ending February 29, 2004 | |
3.35:1.00
|
For the trailing twelve months ending March 31, 2004 | |
3.35:1.00
|
For the trailing twelve months ending April 30, 2004 | |
3.35:1.00
|
For the trailing twelve months ending May 31, 2004 | |
3.50:1.00
|
For the trailing twelve months ending June 30, 2004 | |
3.50:1:00
|
For the trailing twelve months ending July 31, 2004 | |
3.50:1.00
|
For the trailing twelve months ending August 31, 2004 | |
3.50:1.00
|
For the trailing twelve months ending September 30, 2004 | |
3.25:1.00
|
For the trailing twelve months ending October 31, 2004 | |
3.25:1.00
|
For the trailing twelve months ending November 30, 2004 | |
3.35:1.00
|
For the trailing twelve months ending December 31, 2004 | |
3.35:1.00
|
For the trailing twelve months ending January 31, 2005 | |
3.35:1.00
|
For the trailing twelve months ending February 28, 2005 |
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3.35:1.00
|
For the trailing twelve months ending March 31, 2005 | |
3.25:1.00
|
For the trailing twelve months ending April 30, 2005 | |
3.10:1.00
|
For the trailing twelve months ending May 31, 2005 | |
3.00:1.00
|
For the trailing twelve months ending June 30, 2005 | |
2.75:1.00
|
For each trailing twelve months period ending on the last day of each calendar month thereafter” |
(b) Section 9.18 of the Loan Agreement is hereby amended in its entirety to read as follows:
“9.18 Minimum EBITDA. (a) Borrowers and their Subsidiaries, on a
consolidated basis, shall, at all times have, and shall maintain, EBITDA, measured on a
quarter-end basis, of at least the required amount set forth in the following table for
the applicable period set forth opposite thereto:
| Applicable Amount | Applicable Period | |
$10,000,000 |
For the trailing twelve months ending December 31, 2003 | |
$10,000,000 |
For the trailing twelve months ending March 31, 2004 | |
$12,000,000 |
For the trailing twelve months ending June 30, 2004 | |
$12,500,000 |
For the trailing twelve months ending September 30, 2004 | |
$11,500,000 |
For the trailing twelve months ending December 31, 2004 | |
$11,500,000 |
For the trailing twelve months ending March 31, 2005 | |
$12,000,000 |
For the trailing twelve months ending June 30, 2005 | |
$11,000,000 |
For each trailing twelve months period ending on the last day of each quarter thereafter |
(b) Borrowers and their Subsidiaries, on a consolidated basis, shall, at all times
have, and shall maintain, Rubber Group EBITDA, measured on a quarter-end basis, of at
least the required amount set forth in the following table for the applicable period
set forth opposite thereto:
| Applicable Amount | Applicable Period | |
$3,250,000 |
For the three month period ending September 30, 2004 |
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| Applicable Amount | Applicable Period | |
$5,000,000 |
For the six month period ending December 31, 2004 | |
$9,500,000 |
For the nine month period ending March 31, 2005 | |
$12,000,000 |
For the trailing twelve months ending June 30, 2005 | |
$11,000,000 |
For each trailing twelve months period ending on the last day of each quarter thereafter” |
(c) Section 9.19 of the Loan Agreement is hereby amended in its entirety to read as follows:
“9.19 Fixed Charge Coverage Ratio. Borrowers and their Subsidiaries, on a
consolidated basis, shall, at all times have, and shall maintain, a Fixed Charge
Coverage Ratio, measured on a quarter-end basis, of at least the required amount set
forth in the following table for the applicable period set forth opposite thereto:
| Fixed Charge Coverage | ||
| Ratio | Applicable Period | |
0.50:1.00
|
For the three months ending December 31, 2003 | |
0.85:1.00
|
For the three months ending March 31, 2004 | |
0.45:1.00
|
For the six months ending June 30, 2004 | |
0.45:1.00
|
For the nine months ending September 30, 2004 | |
0.55:1.00
|
For the twelve months ending December 31, 2004 | |
0.60:1.00
|
For the trailing twelve months ending March 31, 2005 | |
0.75:1.00
|
For the trailing twelve months ending June 30, 2005 | |
0.65:1.00
|
For each trailing twelve months period ending on the last day of each quarter thereafter” |
SECTION 3. Representations and Warranties. In addition to the continuing representations,
warranties and covenants heretofore or hereafter made by each Borrower to Agent and Lenders
pursuant to the other Financing Agreements, Borrowers, jointly and severally, hereby represent,
warrant and covenant with and to Agent and Lenders as follows (which representations, warranties
and covenants are continuing and shall survive the execution and delivery hereof and shall be
incorporated into and made a part of the Financing Agreements):
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3.1 Corporate Power and Authority. This Sixth Amendment and each other agreement or
instrument to be executed and delivered by each Borrower have been duly authorized, executed and
delivered by all necessary action on the part of such Borrower which is a party hereto and thereto
and, if necessary, its stockholders, and is in full force and effect as of the date hereof, as the
case may be, and the agreements and obligations of each Borrower contained herein and therein
constitute legal, valid and binding obligations of such Borrower enforceable against it in
accordance with their terms except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability affecting the
enforcement of creditors’ rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.2 Consents: Approvals. No action of, or filing with, or consent of any
Governmental Authority is required to authorize, or is otherwise required in connection with, the
execution, delivery and performance of this Sixth Amendment other than the filing of a Report on
Form 8-K pursuant to the Exchange Act.
3.3 No Event of Default. No Event of Default, and no condition or event which, with
the giving of notice or lapse of time, or both, would constitute an Event of Default, exists or
has occurred and is continuing after giving effect to the provisions of this Sixth Amendment. All
of the representations and warranties set forth in the Loan Agreement and the other Financing
Agreements, are true and correct in all respects on and as of the date hereof as if made on the
date hereof, except to the extent any such representation or warranty is made as of a specified
date, in which case such representation or warranty shall have been true and correct as of such
date.
SECTION 4. Conditions Precedent. This Sixth Amendment shall be effective as of the date
hereof but only upon the satisfaction of each of the following conditions precedent in a manner
satisfactory to Agent:
4.1 Agent shall have received an original of this Sixth Amendment, duly authorized, executed
and delivered by Borrowers;
4.2 Agent shall have received a fully-executed copy of Amendment No. 7 to the Working
Capital Loan Agreement, the form and substance of which shall be satisfactory to Agent;
4.3 the Working Capital Agent and the Working Capital Lenders shall have consented to this
Sixth Amendment and the amendments to the Loan Agreement set forth herein;
4.4 no Default or Event of Default shall exist or have occurred and be continuing; and
4.5 all legal matters incident to this Sixth Amendment shall be satisfactory to the Agent
and its counsel.
SECTION 5. Consent to Working Capital Amendment. The Agent and the Lenders hereby acknowledge
that the Borrowers are entering into an amendment to the Working Capital Lender Agreements on the
terms set forth in that certain Amendment No. 6 to Amended and
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Restated Loan and Security Agreement, dated as of the date hereof, among the Borrowers, the
Working Capital Agent and the Working Capital Lenders, and consent thereto for all purposes in
accordance with the provisions of Section 9.9(e)(v) of the Loan Agreement.
SECTION 6. Additional Events of Default. The parties hereto acknowledge, confirm and agree
that the failure of any Borrower to comply with the covenants, conditions and agreements contained
herein or in any other agreement, document or instrument at any time executed by any Borrower in
connection herewith shall in each case constitute an Event of Default under the Financing
Agreements.
SECTION 7. Miscellaneous.
7.1 Effect of this Sixth Amendment. Except as modified pursuant hereto, no other
changes or modifications to the Financing Agreements are intended or implied and in all other
respects the Financing Agreements are hereby specifically ratified, restated and confirmed by all
parties hereto as of the effective date hereof. To the extent of conflict between the terms of
this Sixth Amendment and the other Financing Agreements, the terms of this Sixth Amendment shall
control. The Loan Agreement and this Sixth Amendment shall be read and construed as one
agreement.
7.2 Governing Law. The rights and obligations hereunder of each of the parties
hereto shall be governed by and interpreted and determined in accordance with the internal laws of
the State of New York but excluding any principles of conflicts of law or other rule of law that
would cause the application of the law of any jurisdiction other than the laws of the State of New
York.
7.3 Binding Effect. This Sixth Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and assigns.
7.4 Further Assurances. The parties hereto shall execute and deliver such
additional documents and take such additional action as may be necessary to effectuate the
provisions and purposes of this Sixth Amendment.
7.5 Counterparts. This Sixth Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and the same
agreement. In making proof of this Sixth Amendment, it shall not be necessary to produce or
account for more than one counterpart hereof signed by each of the parties hereto. Delivery of an
executed counterpart of this Sixth Amendment by facsimile or electronic mail shall have the same
force and effect as delivery of an original executed counterpart of this Sixth Amendment. Any
party delivering an executed counterpart of this Sixth Amendment by facsimile or electronic mail
also shall deliver an original executed counterpart of this Sixth Amendment, but the failure to
deliver an original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Sixth Amendment as to such party or any other party hereto.
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IN WITNESS WHEREOF, Agent, Lenders and Borrowers have caused this Sixth Amendment to be duly
executed as of the day and year first above written.
| AGENT and LENDERS | BORROWERS | |||||||||
| ABLECO FINANCE LLC, as Agent and Lender (on behalf of itself and its affiliate assigns) | LEXINGTON PRECISION CORPORATION | |||||||||
By:
|
/s/ ▇▇▇ ▇▇▇▇ | By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||
| Title: SVP | Title: President | |||||||||
| LEXINGTON RUBBER GROUP, INC. | ||||||||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ | |||||||||
| Title: Chairman | ||||||||||