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Exhibit 1062
February 28, 1996
Lexington Precision Corporation
767 Third Avenue
New York, New York 10017
Re: Amendment to Financing Agreements and Consent
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Gentlemen:
Reference is made to certain financing agreements dated January 11, 1990
between Lexington Precision Corporation ("LPC") 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"). Reference is further
made to the letter agreement re: Amendment to Financing Agreements dated
January 16, 1996 between Congress and LPC (the "1996 LPC Real Estate Loan
Amendment") pursuant to which, INTER ALIA, Congress has made the LPC Arizona
Real Estate Loan and the LPC New York Real Estate Loan A to LPC and has agreed,
upon certain terms and conditions, to make the LPC New York Real Estate Loan B
to LPC.
LPC has requested Congress' consent to a transfer of the real property
securing the LPC New York Real Estate Loan A and required to secure the LPC New
York Real Estate Loan B in connection with a proposed sale/leaseback
transaction between LPC and the Chautauqua County Industrial Development
Agency. Congress is willing to provide such consent upon the terms and
conditions set forth in this Amendment to Financing Agreements and Consent
(this "Amendment") and, in connection with such consent and other matters
pertaining to the financing arrangements pursuant to the Accounts Agreement and
the other Financing Agreements, the parties hereto hereby agree to amend the
Financing Agreements, as set forth below (capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed thereto in the
Accounts Agreement, the 1996 LPC Real Estate Loan Amendment and the other
Financing Agreements):
1. Definitions.
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(a) "Chautauqua IDA" shall mean the County of Chautauqua Industrial
Development Agency, a public benefit corporation of the State of New York and a
body corporate and politic organized under the New York State Industrial
Development Agency Act, and its successors and assigns.
(b) "Lakewood Deed" shall mean the Warranty Deed dated as of February 28,
1996 executed and delivered by LPC conveying title to the Lakewood Facility to
the Chautauqua IDA.
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(c) "Lakewood Facility" shall mean the real property subject to the
Mortgage and Security Agreement, dated January 16, 1996 ("Existing Lakewood
Mortgage"), made by LPC in favor of Congress to secure LPC's Obligations in
respect of the LPC New York Real Estate Loan A (plus other sums as provided in
the Existing Lakewood Mortgage), and which will secure, as well, other
Obligations of LPC, including LPC's Obligations in respect of the LPC New York
Real Estate Loan B upon and after the making of such loan as to be provided in
the Consolidated Mortgage (as defined in Section 5(a)(ii) of the 1996 LPC Real
Estate Loan Amendment, as amended by this Amendment), plus additional sums as
to be provided in the Consolidated Mortgage.
(d) "Lakewood IDA Agreements" shall mean the Lakewood Deed, the Lakewood
IDA Lease, the Lakewood PILOT Agreement, together with all documents
instruments and agreements executed and delivered in connection therewith or
pursuant thereto, as the same now exist or may hereafter be amended, modified,
supplemented, renewed, restated or replaced.
(e) "Lakewood IDA Lease" shall mean the Lease dated as of February 1, 1996
between the Chautauqua IDA, as lessor, and LPC (d/b/a Falconer Die Casting
Company), as lessee.
(f) "Lakewood IDA Transaction" shall mean the sale/leaseback transaction
between LPC and the Chautauqua IDA pursuant to which LPC shall, pursuant to the
Lakewood Deed, convey title to the Lakewood Facility to the Chautauqua IDA
which shall, simultaneously therewith, together with LPC, enter into the
Lakewood IDA Lease, the Lakewood PILOT Agreement and the other Lakewood IDA
Agreements, in each case as such agreements are in effect on the date hereof.
(g) "Lakewood PILOT Agreement" shall mean the Payment in Lieu of Taxes
Agreement dated as of February 1, 1996 between LPC and the Chautauqua IDA
providing for certain payments by LPC in lieu of certain real estate tax levies
upon the Lakewood Facility.
2. CONSENT REGARDING LAKEWOOD IDA TRANSACTION. To the extent such consent is
required under the Financing Agreements, Congress hereby consents to the
conveyance of title to the Lakewood Facility from LPC to the Chautauqua IDA
pursuant to the Lakewood Deed and the simultaneous leaseback of the Lakewood
Facility by the Chautauqua IDA to LPC pursuant to the Lakewood IDA Lease, in
each case pursuant to such agreements as in effect on the date hereof;
PROVIDED, HOWEVER, that the Chautauqua IDA shall acquire title to the Lakewood
Facility expressly subject to the lien of the Existing Lakewood Mortgage in
favor of Congress, and that in no event shall LPC be released or discharged
from any of the LPC Obligations secured by the Existing Lakewood Mortgage, nor
shall such conveyance or Congress' consent thereto or the
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Lakewood IDA Agreements or any provision thereof in any manner release or
impair the lien of the Existing Lakewood Mortgage.
3. AMENDMENT TO REQUIREMENTS FOR LPC NEW YORK REAL ESTATE LOAN B. Section
5(a) of the 1996 LPC Real Estate Loan Amendment is hereby deleted and the
following substituted therefor:
"(a) Congress shall have received an executed original or executed original
counterparts (as the case may be) of each of the following, each of which shall
be in form and substance satisfactory to Congress:
(i) the LPC New York Real Estate Note B;
(ii) a Mortgage, Spreader Agreement and
Agreement of Consolidation and
Modification among Congress, LPC and the
Chautauqua IDA ("Consolidated Mortgage"),
which amends, modifies, spreads and
consolidates the terms of the existing
Mortgage and Security Agreement in favor
of Congress with respect to LPC's
Lakewood, New York real property
("Lakewood Facility") to secure, with a
consolidated first mortgage lien upon the
fee simple estate in such real property
owned by the Chautauqua IDA and the
leasehold estate in such real property
owned by LPC (including, without
limitation, its early lease termination
and purchase options with respect to the
Lakewood Facility) (A) $825,000 in
principal amount of LPC's Obligations in
respect of (1) the LPC New York Real
Estate Loan A, (2) the LPC New York Real
Estate Loan B, (3) other outstanding term
loans previously made by Congress to LPC,
and (4) the guarantee by LPC of
outstanding and future term loans made by
Congress to LCI, plus (B) interest and
other obligations and sums of the kinds
secured under the existing Mortgage and
Security Agreement, and which shall
otherwise contain terms and conditions
substantially similar to those contained
in the existing Mortgage and Security
Agreement, except that such Consolidated
Mortgage may be without representation,
warranty or covenant on the part of, and
without recourse to, the Chautauqua IDA,
except for those representations,
warranties and covenants by, and recourse
against, the Chautauqua IDA, as to which
enforcement against the Chautauqua IDA is
limited to the interest
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of the Chautauqua IDA in the Lakewood
Facility;
(iii) a title insurance policy issued to
Congress insuring the lien of the
Consolidated Mortgage in the amount of
$825,000, issued by the title insurance
company that issued the existing title
insurance policy insuring the lien of the
Existing Lakewood Mortgage and containing
only such exceptions, terms and
conditions, and including such
endorsements, as are included in such
existing policy;
(iv) a resolution duly adopted by the
Chautauqua IDA authorizing it to join with
LPC in the execution of the Consolidated
Mortgage to encumber their respective
interests in the Lakewood Facility (but
without recourse to the Chautauqua IDA
beyond its interest in the Lakewood
Facility);
(v) a Certificate of Occupancy or other
municipal certification of completion, by
no later than May 31, 1996, of the
improvements to the Lakewood Facility
described in the Building Proposal of
Kessel Construction dated June 15, 1995
which has been submitted to Congress; and
(vi) an updated NYSAPLS standard survey
certified to Congress reflecting the
completion of the improvements described
in subparagraph (v) above (the "Lakewood
Improvements") by no later than May 31,
1996."
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by LPC to Congress pursuant to the Financing Agreements, LPC hereby
represents, warrants and covenants with and to Congress 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):
(a) No Event of Default exists or has occurred and is
continuing on the date of this Amendment and on the date of each advance in
respect of the LPC New York Real Estate Loan B; and
(b) This Amendment has been duly executed and delivered
by LPC and is in full force and effect as of the date hereof, and the
agreements and obligations of LPC contained
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herein constitute the legal, valid and binding obligations of LPC enforceable
against LPC in accordance with their terms.
5. CONDITIONS TO THE EFFECTIVENESS OF THIS AMENDMENT. Anything
contained in this Amendment to the contrary notwithstanding, LPC shall only be
permitted to enter into the Lakewood IDA Agreements and consummate the
transactions provided thereunder pursuant to the consent set forth herein and
the other terms and conditions of this Amendment and only upon the satisfaction
of the following conditions precedent to the effectiveness of this Amendment:
(a) Congress shall have received an executed original or
executed original counterparts (as the case may be) of this Amendment together
with the following, each of which shall be in form and substance satisfactory
to Congress;
(b) The Lakewood IDA Transaction shall have closed
pursuant to the Lakewood IDA Agreements, including authorizing resolutions, in
each case in form and substance satisfactory to Congress and Congress shall
have received true and complete copies of the Lakewood IDA Agreements in effect
on the date hereof;
(c) Congress shall have received a letter from the issuer
of its existing title insurance policy with respect to the lien of the Existing
Lakewood Mortgage, or an authorized agent thereof, confirming that neither the
conveyance of title to the Lakewood Facility to the Chautauqua IDA nor
Congress' consent thereto will affect or impair Congress' title insurance
coverage as to the lien of the Existing Lakewood Mortgage under such policy
(which condition shall be deemed satisfied by the letter dated February 7, 1996
received by Congress' counsel from such issuer);
(d) Congress shall have received a letter from Protection
Mutual Insurance Company ("Protection Mutual"), stating that neither the
conveyance of title to the Lakewood Facility to the Chautauqua IDA nor
Congress' consent thereto will affect or impair the rights or interests of
Congress in the casualty and hazard insurance coverage for the Lakewood
Facility under Policy No. 727901-93 notwithstanding anything to the contrary
contained in such policy or any mortgagee loss payable clause issued in favor
of Congress by Protection Mutual (which condition shall be deemed satisfied by
the letter dated February 27, 1996, by Protection Mutual to Congress);
(e) All representations and warranties contained herein,
in the Accounts Agreements and in the other Financing Agreements shall be true
and correct in all material respects; and
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(f) No Event of Default shall have occurred and no event
shall have occurred or condition shall be existing which, with notice or
passage of time or both, would constitute an Event of Default.
6. EFFECT OF THIS AMENDMENT. Except as modified pursuant hereto,
the Accounts Agreement and all supplements to the Accounts Agreement, the 1996
LPC Real Estate Loan Amendment, all existing mortgages by LPC in favor of
Congress and all other Financing Agreements, are hereby specifically ratified,
restated and confirmed by the parties hereto as of the date hereof and no
existing defaults or Events of Default have been waived in connection herewith.
To the extent of conflict between the terms of this Amendment and the Accounts
Agreement or any of the other Financing Agreements, including the 1996 LPC Real
Estate Loan Amendment, the terms of this Amendment control.
7. FURTHER ASSURANCES. LPC shall execute and deliver such
additional documents and take such additional actions as may reasonably be
requested by Congress to effectuate the provisions and purposes of this
Amendment.
8. GOVERNING LAW. This Amendment 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 the duly authorized officers, the parties
hereto mutually covenant, warrant and agree as set forth herein.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By: Frank L. Chiovari
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Title: Vice President
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AGREED AND ACCEPTED:
LEXINGTON PRECISION CORPORATION
By: Warren Delano
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Title: President
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CONSENT
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The undersigned guarantor hereby consents to the foregoing Amendment,
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
PRECISION CORPORATION ("LPC") to CONGRESS FINANCIAL CORPORATION ("Congress"),
including, without limitation, all indebtedness, liabilities and obligations
under the Financing Agreements as amended hereby.
LEXINGTON COMPONENTS, INC.
By: Warren Delano
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Title: Vice Chairman
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