1
Exhibit 10.152
February 8, 2001
Lexington Rubber Group, Inc., formerly
known as Lexington Components, Inc.
767 Third Avenue
New York, New York 10017
Re: New Equipment Term Loan Limit
-----------------------------
Gentlemen:
Reference is made to certain financing agreements dated January 11,
1990 between Lexington Rubber Group, Inc. ("LRG") and Congress Financial
Corporation ("Congress"), including, but not limited to, an Accounts Financing
Agreement [Security Agreement], as amended (the "Accounts Agreement"), and all
supplements thereto and all other related financing and security agreements
(collectively, all of the foregoing, as the same have heretofore or
contemporaneously been or may be hereafter, amended, replaced, extended,
modified or supplemented, the "Financing Agreements"). Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings ascribed
thereto in the Accounts Agreement and the other Financing Agreements.
Pursuant to the terms of the letter agreement re: Amendment to
Financing Agreements, dated as of March 25, 1994, as amended, Congress may from
time to time make New Equipment Term Loans to LRG and Lexington Precision
Corporation ("LPC") up to the aggregate principal amount of $5,000,000 (the "New
Equipment Term Loan Limit"). Notwithstanding such New Equipment Term Loan Limit,
Congress is willing to make a New Equipment Term Loan to LRG in the amount of
$2,000,000 evidenced by the New Equipment Term Note, dated of even date
herewith, made by LRG payable to Congress in the original principal amount of
$2,000,000 (the "February 2001 LRG New Equipment Term Loan").
LRG and Congress hereby agree as follows:
The February 2001 LRG New Equipment Term Loan shall not be considered
for purposes of the New Equipment Term Loan Limit.
All of the proceeds of the February 2001 LRG New Equipment Term Loan
shall be used solely for the purchase by LRG of the equipment set forth on
Schedule A attached hereto and made a part hereof and for the payment of
accounts payable owing by LRG to the vendors of such equipment who are listed on
Schedule A and for no other purposes, as follows: (a) $1,500,000 of the proceeds
of the February 2001 LRG New Equipment Term Loan must be used for such purposes
within ninety (90) days from the date of this letter agreement and (b) the
2
remaining $500,000 of the proceeds of the February 2001 LRG New Equipment Term
Loan must be used for such purposes within one hundred thirty-five (135) days
from the date of this letter agreement.
Notwithstanding any provision of the Financing Agreements to the
contrary, after the date hereof, Congress shall not be obligated to make any New
Equipment Term Loans.
In addition to all other fees, charges, interest and expenses payable
by LRG to Congress, LRG shall pay to Congress, or Congress, at its option, may
charge the account of LRG maintained by Congress, a fee for making the February
2001 LRG New Equipment Term Loan and for entering into this letter agreement in
the amount equal to $150,000, which fee is fully earned as of the date hereof
and shall constitute part of the Obligations, payable as follows: (a) $40,000 on
the date hereof and (b) $12,222.22 on May 1, 2001 and on the first day of each
of the next consecutive eight (8) months, PROVIDED, THAT, any such monthly
payment of such fee as set forth in clause (b) above shall not be due and
payable if as of the due date of any such monthly payment the Obligations have
been paid in full and the Financing Agreements have been terminated.
Except as set forth herein, all terms and provisions of the Financing
Agreements shall remain in full force and effect and are hereby specifically
ratified, restated and confirmed by the parties hereto as of the date hereof.
Except as expressly set forth herein, no other or further amendment, waiver or
consent is implied, and LRG shall not be entitled to any other or further
amendment, waiver or consent by virtue of the provisions of this letter
agreement or with respect to the subject matter of this letter agreement.
In addition to the continuing representations, warranties and
covenants heretofore or hereafter made by LRG to Congress pursuant to the
Financing Agreements, LRG hereby represents, warrants and covenants with and to
Congress that: (a) except for the Event of Default referenced in the Agreement,
dated as of January 31, 2001, among LPC, LRG and Congress and the Event of
Default arising from the failure of LRG to comply with subparagraph IV(f) of the
Covenants Supplement to Accounts Financing Agreement [Security Agreement], dated
January 11, 1990, by and between Congress and LRG, as amended, no Event of
Default exists or has occurred and is continuing on the date of this letter
agreement and (b) this letter agreement has been duly executed and delivered by
LRG and is in full force and effect as of the date hereof, and the agreements
and obligations of LRG contained herein constitute the legal, valid and binding
obligations of LRG enforceable against LRG in accordance with their terms.
This letter agreement shall be binding upon and inure to the benefit
of each of the parties hereto and their respective successors and assigns.
This letter agreement may be executed and delivered in counterparts,
but all of such counterparts shall together constitute but one and the same
agreement. In making proof of this letter agreement, it shall not be necessary
to produce or account for more than one counterpart
2
3
hereto signed by each of the parties hereto. This letter agreement may be
delivered by telecopier with the same force and effect as if it were a manually
delivered counterpart.
This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to its
principles of conflicts of law.
By the signatures hereto of their duly authorized officers, the parties
hereto agree as set forth herein.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By: Herbert C. Korn
--------------------------------------
Title: Vice President
-------------------------------------
AGREED AND ACCEPTED:
LEXINGTON RUBBER GROUP, INC.
By: Michael A. Lubin
---------------------------------
Title: Chairman of the Board
-------------------------------
3
4
CONSENT
-------
The undersigned guarantor hereby consents to the foregoing letter agreement,
agrees to be bound by its terms applicable to it, and ratifies and confirms the
terms of its Guarantee and Waiver dated January 11, 1990 as applicable to all
present and future indebtedness, liabilities and obligations of LEXINGTON RUBBER
GROUP, INC. ("LRG") to CONGRESS FINANCIAL CORPORATION ("Congress"), including,
without limitation, all indebtedness, liabilities and obligations under the
Financing Agreements as amended hereby.
LEXINGTON PRECISION CORPORATION
By: Michael A. Lubin
------------------------------------
Title: Chairman of the Board
-----------------------------------