EXHIBIT 10-5
AMENDMENT NO. 5 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 5 TO LOAN AND SECURITY AGREEMENT (this "Fifth
Amendment") dated as of June 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").
W I T N E S S E T H:
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 Fifth 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 Fifth 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) "Fifth Amendment" shall mean Amendment No. 5 to Loan
and Security Agreement, dated as of June 30, 2005, by and among the Borrowers,
the Agent and the Lenders.
(b) "Fifth Amendment Effective Date" shall mean the date
the Fifth Amendment becomes effective.
Section 2. Amendments to the Loan Agreement.
2.1. Special Reserve. The definition of the term "Special
Reserve" set forth in Section 1.107 of the Loan Agreement is hereby amended in
its entirety to read as follows:
"1.107 "Special Reserve" shall mean the term "Special
Reserve" as defined in the Working Capital Loan Agreement as in effect on
the Fifth Amendment Effective Date."
2.2. 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
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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
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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
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 the trailing twelve months
ending July 31, 2005
2.75.1.00 For the trailing twelve months
ending August 31, 2005
2.75:1.00 For the trailing twelve months
ending September 30, 2005
2.50:1.00 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
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Applicable Amount Applicable Period
- ----------------- -----------------
$12,500,000 For the trailing twelve months
ending September 30, 2005
$13,500,000 For the trailing twelve months
ending December 31, 2005
$15,000,000 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
$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
$12,500,000 For the trailing twelve months
ending September 30, 2005
$13,000,000 For the trailing twelve months
ending December 31, 2005
$14,000,000 For the trailing twelve months
ending March 31, 2006
$15,000,000 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
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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
0.75:1.00 For the trailing twelve months
ending September 30, 2005
0.85:1.00 For the trailing twelve months
ending December 31, 2005
0.90:1.00 For the trailing twelve months
ending March 31, 2006
1.00:1.00 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):
3.1. Corporate Power and Authority. This Fifth 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
Fifth 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
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Default, exists or has occurred and is continuing after giving effect to the
provisions of this Fifth 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 Fifth 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 Fifth
Amendment, duly authorized, executed and delivered by Borrowers;
4.2. Agent shall have received a fully-executed copy of
Amendment No. 5 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 Fifth 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 Fifth 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. 5 to Amended and 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 Fifth 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
Fifth Amendment and the other Financing Agreements, the terms of this Fifth
Amendment shall control. The Loan Agreement and this Fifth Amendment shall be
read and construed as one agreement.
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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 Fifth 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 Fifth Amendment.
7.5. Counterparts. This Fifth 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 Fifth 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 Fifth Amendment by facsimile or electronic mail shall have the same
force and effect as delivery of an original executed counterpart of this Fifth
Amendment. Any party delivering an executed counterpart of this Fifth Amendment
by facsimile or electronic mail also shall deliver an original executed
counterpart of this Fifth Amendment, but the failure to deliver an original
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Fifth Amendment as to such party or any other party hereto.
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IN WITNESS WHEREOF, Agent, Lenders and Borrowers have caused this
Fifth Amendment to be duly executed as of the day and year first above written.
AGENT and LENDERS BORROWERS
ABLECO FINANCE LLC, as Agent and LEXINGTON PRECISION CORPORATION
Lender (on behalf of itself and its affiliate
assigns)
By: /s/ Dan Wolf By: /s/ Michael A. Lubin
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Title: SVP Title: Chairman
LEXINGTON RUBBER GROUP, INC.
By: /s/ Michael A. Lubin
-------------------------
Title: Chairman