UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): September 3, 2004
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LEXINGTON PRECISION CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-3252 22-1830121
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(Commission File Number) (IRS Employer Identification No.)
40 EAST 52ND STREET, NEW YORK, NY 10022
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(Address of Principal Executive Offices) (Zip Code)
(212) 319 4657
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(Registrant's Telephone Number, Including Area Code)
767 THIRD AVENUE, NEW YORK, NY 10017
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September 3, 2004, Lexington Precision Corporation ("LPC")
and its subsidiary Lexington Rubber Group, Inc., a Delaware corporation
("LRG", and together with LPC, the "Borrowers"), entered into a Loan
Agreement (the "Loan Agreement") with Cohanzick High Yield Partners,
L.P. (the "Lender"). The Loan Agreement provides for the Lender to make
unsecured loans (individually and collectively, the "Term Loan" ) to
the Borrowers during the period from September 3, 2004 through
September 15, 2004, in an aggregate principal amount not to exceed
$7,000,000.
The material terms and conditions of the Loan Agreement are
described under Item 2.03 below and incorporated herein by reference.
On September 3, 2004, the Borrowers also entered into
amendments to their existing senior secured loan and security
agreements in order to permit the Borrowers to enter into the Loan
Agreement.
The Amended and Restated Loan and Security Agreement, dated
December 18, 2003, among LPC, LRG, the lenders from time to time
parties thereto, Congress Financial Corporation, a Delaware corporation
("Congress"), as agent to the lenders and The CIT Group/Business Credit
Inc., as co-agent, as amended (the "Congress Loan Agreement") was
amended to permit the Borrowers to incur indebtedness under the Loan
Agreement and to permit the Borrowers to use the proceeds of the Term
Loan to purchase LPC's 12% Senior Subordinated Notes (the "Senior
Subordinated Notes"), subject to certain conditions.
The Loan and Security Agreement, dated December 18, 2003,
among LPC, LRG, the lenders from time to time parties thereto and
Ableco Finance LLC, a Delaware limited liability company ("Ableco"), as
agent and lender, as amended (the "Ableco Loan Agreement") was also
amended pursuant to a waiver and consent (the "Waiver and Consent").
The Waiver and Consent permits the Borrowers to incur indebtedness
under the Loan Agreement and permits the proceeds of the Term Loan to
be used to purchase Senior Subordinated Notes and for working capital
and general corporate purposes, subject to limitations on the amount of
the proceeds of the Term Loan that may be used to purchase Senior
Subordinated Notes.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION
UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The date, parties and a brief description of the Loan
Agreement are provided in Item 1.01 above, and incorporated herein by
reference. The material terms of the Loan Agreement are described here.
The proceeds of the Term Loan made under the Loan Agreement
may be used by the Borrowers only to purchase Senior Subordinated Notes
and for working capital and general
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corporate purposes, provided that the Loan Agreement requires that at
least $2,000,000 of the proceeds be used to repay revolving loans made
pursuant to the Congress Loan Agreement.
Interest, if paid 100% in cash, is at the rate of 12% per
annum plus 1.8% per annum plus, effective September 1, 2005, the
product of 0.6% and the Outstanding Ratio (as defined below) on
September 1, 2005 and, effective September 1, 2006, the product of 0.6%
and the Outstanding Ratio on September 1, 2006 (the "Cash Rate"). The
Borrowers may elect to pay interest at the PIK rate, in which case they
shall pay interest at 12% per annum in cash and interest at a rate
equal to 3.6% per annum plus, effective September 1, 2005, the product
of 1.2% per annum and the Outstanding Ratio on September 1, 2005 and,
effective September 1, 2006, the product of 1.2% per annum and the
Outstanding Ratio on September 1, 2006. The "Outstanding Ratio" as of
any date is the principal amount of the Term Loan outstanding on such
date divided by the principal amount of the Term Loan outstanding on
September 15, 2004, not to exceed one. If any payment is not made when
due, the Term Loan will bear interest at a default rate equal to the
Cash Rate plus 5% per annum.
The Loan Agreement requires that, if the Borrowers pay a fee
or other compensation relating to an amendment or waiver of covenants
under the Ableco Loan Agreement (or in the event of a refinancing of
the indebtedness under the Ableco Loan Agreement, such new loan
agreement or the Congress Loan Agreement, as elected by Lender), a
corresponding fee must be paid to the Lender.
The unpaid principal balance of the Term Loan is payable in
full on June 30, 2007 or on such earlier date on which the Term Loan
may become due and payable pursuant to the Loan Agreement. The
aggregate outstanding principal amount of the Term Loan, all interest
and all other amounts due may be accelerated and become due and payable
on the occurrence of an Event of Default. The material Events of
Default include the following:
o Failure to pay the principal amount of the Term Loan
when due or failure to pay interest within five
business days after it is due;
o A breach of any representation or warranty in the Loan
Agreement or the Note (as defined below);
o A covenant default under the Loan Agreement (subject in
some cases to a cure period) or the Note;
o Default in the payment of principal under the Ableco
Loan Agreement or the Congress Loan Agreement at
maturity or termination which is not cured within five
days (whether or not waived);
o Default in any payment of principal (other than at
maturity or upon termination) under the Ableco Loan
Agreement or the Congress Loan Agreement that is not
waived;
o Any default in the payment of interest under the Ableco
Loan Agreement or the Congress Loan Agreement which is
not cured in five days (whether or not waived);
o Defaults or specified events relating to pension plans
of the Borrowers;
o Judgments against a Borrower in excess of $500,000
individually, or $1,000,000 in the aggregate, or
judgments (other than for the payment of money),
injunctions and the like that have or are reasonably
likely to have a material adverse effect;
o Dissolution, suspension of business, or sale of
substantially all of the Borrowers' assets;
o Any Borrower makes an assignment for the benefit of
creditors;
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o A case or proceeding under the bankruptcy laws or any
insolvency, reorganization, receivership, readjustment
of debt, dissolution, or liquidation law, is filed
against any Borrower and not dismissed within 45 days
or any Borrower admits the allegations in such
proceeding or otherwise consents thereto or does not
contest the same;
o A case or proceeding under the bankruptcy laws or any
insolvency, reorganization, receivership, readjustment
of debt, dissolution, or liquidation law, is filed by
any Borrower;
o Defaults (a) in the payment of principal, interest or
other monetary obligations in respect of any other
indebtedness of the Borrowers in excess of $1,000,000
in the aggregate, or (b) any other default in respect
of any indebtedness, if the holders of such
indebtedness accelerate such indebtedness or otherwise
exercise their remedies with respect to such defaults;
or
o Any change of control.
The Borrowers executed a term note (the "Note") to evidence
the Term Loan.
The Borrowers are jointly and severally liable for the amounts
due under the Loan Agreement and the Note.
On September 7, 2004, the Borrowers borrowed the full amount
of the term loan in the amount of $7,000,000 under the Loan Agreement.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibits
Exhibit 10.1 Loan Agreement, dated as of September 3, 2004, among
Lexington Precision Corporation, Lexington Rubber
Group, Inc. and Cohanzick High Yield Partners, L.P.,
as Lender.
Exhibit 10.2 Term Note, dated as of September 7, 2004, made by
Lexington Precision Corporation and Lexington Rubber
Group, Inc., payable to the order of Cohanzick High
Yield Partners, L.P., as lender, in the principal
amount of $7,000,000.
Exhibit 10.3 Waiver and Consent, dated as of September 3, 2004,
among Lexington Precision Corporation, Lexington
Rubber Group, Inc. and Ableco Finance LLC, as agent
and lender.
Exhibit 10.4 Amendment No. 3 to Amended and Restated Loan and
Security Agreement, dated as of September 3, 2004,
among Lexington Precision Corporation, Lexington
Rubber Group, Inc., Congress Financial Corporation,
as agent and Lender, and The CIT Group/Business
Credit, Inc., as Lender.
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SIGNATURES
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 hereunto duly authorized.
Lexington Precision Corporation
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(Registrant)
Date: September 10, 2004
By: /s/ Dennis J. Welhouse
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Title: Senior Vice President and
Chief Financial Officer
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