FIRST AMENDMENT TO FORBEARANCE AGREEMENT
Exhibit 10-1
Execution Copy
FIRST AMENDMENT TO FORBEARANCE AGREEMENT
This First Amendment to Forbearance Agreement (as defined below), dated July 20, 2007 (the
“Amendment”) is entered into by Lexington Precision Corporation and Lexington Rubber Group,
Inc. (collectively, the “Borrowers”), as borrowers under that certain Credit and Security
Agreement with Borrowers dated May 31, 2006 (as amended to date and as may be amended, restated or
otherwise modified from time to time, the “Credit Agreement”), and CapitalSource Finance
LLC (“CapitalSource”), as a lender, as collateral agent and administrative agent for itself
and other lenders under the Credit Agreement (CapitalSource, when acting in such capacity, is
herein call the “Revolver Agent”), and as Co-Documentation Agent, and Xxxxxxx Business
Credit Corporation (“Xxxxxxx”) as a lender (CapitalSource and Xxxxxxx, as lenders,
collectively the “Revolver Lenders”) and as Co-Documentation Agent, and by and among
Borrowers as borrowers under that certain Loan and Security Agreement dated May 31, 2006 (as
amended to date and as may be amended, restated or otherwise modified from time to time, the
“Loan Agreement”) and CSE Mortgage LLC (“CSE”), as a lender and as collateral agent
for itself and each other lender under the Loan Agreement (CSE, when acting in such capacity, is
herein called the “Loan Agent”) (Revolver Agent and Loan Agent, collectively, the
“Agents”), and DMD Special Situations Funding LLC (“DMD”), as a lender under the
Loan Agreement (CSE and DMD collectively, the “Mortgage Loan Lenders”) (Revolver Lenders
and Mortgage Loan Lenders collectively, the “Lenders”; those Lenders agreeing to the
Forbearance Agreement the “Forbearing Lenders”).
RECITALS:
A. The Borrowers, the Agents, and the Forbearing Lenders (collectively, the “Parties”)
are party to that certain Forbearance Agreement dated as of May 18, 2007 (the “Forbearance
Agreement”).1
B. The Borrowers have requested, and the Agents and the Forbearing Lenders have agreed, to
amend the Forbearance Agreement by eliminating certain Events of Termination under the Forbearance
Agreement.
NOW, THEREFORE, for good and valued consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, the Parties agree as follows:
1. In clause (b) of Section 16 of the Forbearance Agreement, the text “, provided,
however, that the failure of Borrowers to comply with Section 13c of this Agreement prior
to the date of the First Amendment to Forbearance Agreement shall not constitute an Event of
Termination” shall be added immediately after the text “Paragraphs 11-13 of this Agreement”.
2. Except as herein amended, all terms and conditions of the Forbearance Agreement are hereby
reaffirmed and shall remain in full force and effect as originally written and shall be construed
as one document with this Amendment.
| 1 | Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Forbearance Agreement. |
3. Ratification of Existing Agreements and Amounts Owing. Borrowers hereby reaffirm
all of the terms, conditions, representations and warranties of each of the Documents and the
Forbearance Agreement and acknowledge that all of the Obligations are, by Borrowers’ execution of
this Amendment, ratified and confirmed in all respects by Borrowers. Borrowers acknowledge that,
as of July 20, 2007 (prior to any borrowing July 20, 2007), Borrowers are obligated to repay the
outstanding Obligations to Agents and Lenders, including without limitation $38,204,341.05 of
outstanding principal, $907,000 of L/C Obligations, all accrued and unpaid interest, late charges,
pre-payment premiums, and all reasonable fees, costs and expenses, including without limitation
legal fees and expenses due pursuant to the Documents, the Forbearance Agreement and this Amendment
(whether incurred by outside or in-house legal counsel) (the “Balance”). The Balance is
subject to no offset, recoupment, claim, counterclaim or defense of any kind to their enforcement.
Borrowers acknowledge and agree that they are unconditionally liable to Lenders on a joint and
several basis under the Documents for the payment of all Obligations, plus all accrued and unpaid
interest, late charges, pre-payment premiums, and all fees, costs and expenses incurred by Agents
and Lenders, including without limitation reasonable legal fees and expenses, including in-house
and outside attorneys’ fees and expenses, due pursuant to the Documents, the Forbearance Agreement
and this Amendment, the Agents’ Financial Advisor’s fees and expenses described below, and all
other Obligations, each as set forth in the Documents, the Forbearance Agreement or in this
Amendment. Borrowers reaffirm that all Obligations are subject to the security interests previously
granted under the Documents to the Lenders, that the Agents have, and will continue to have after
execution of this Amendment, a continuing first (and second, as applicable) priority, perfected
Lien on the Collateral, whether now owned or hereafter acquired, created or arising, as set forth
in the Documents, subject to no Liens other than Liens expressly permitted under the Documents.
Borrowers acknowledge and agree that nothing herein contained in any way impairs Lenders’ existing
rights under the Documents or the Forbearance Agreement or Agents’ first and second (as applicable)
priority lien status in the Collateral.
4. Representations and Warranties. Borrowers hereby represent and warrant that: (a)
Borrowers are duly formed, validly existing and in legal good standing in the State of Delaware,
that each of Borrowers has the power and authority to enter into this Amendment; (b) Borrowers have
duly executed and delivered this Amendment and this Amendment constitutes the valid, binding and
legal obligation of Borrowers; (c) this Amendment is not being entered into with the intent to
hinder or defraud any person; and (d) the recitals set forth in the Recitals of this Amendment and
all information and documents provided to Lenders in connection herewith are true, accurate and
complete in all material respects. Further, Borrowers confirm, reaffirm and restate in all material
respects to the Lenders, on and as of the date of this Amendment first indicated above, the
representations and warranties set forth in the Loan Agreement, the Credit Agreement, the Former
Forbearance Agreement, the Forbearance Agreement and the other Documents, except as may be set
forth herein or to the extent that such representations and warranties solely relate to a specific
earlier date in which case Borrowers confirm, reaffirm and restate in all material respects such
representations and warranties as of such earlier date. Each request for an Advance under the
Revolving Facility shall constitute Borrowers’ confirmation, reaffirmation and restatement in all
material respects of the representations and warranties set forth in this Amendment, the Loan
Agreement, the Credit Agreement, the Former Forbearance Agreement, the Forbearance Agreement and
the other Documents as of the date of each such request, except as set forth herein or except to
the extent that such representations and warranties relate to a specific earlier date in which case
each such request shall constitute Borrowers’
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confirmation, reaffirmation and restatement in all material respects of such representations
and warranties as of such earlier date.
5. Release of Lenders. By execution of this Amendment, Borrowers acknowledge and
confirm that they do not have any offsets, defenses or claims whatsoever against Agents, Lenders,
or any of Agents or Lenders’ subsidiaries, affiliates, officers, directors, employees, agents,
consultants, attorneys, predecessors, successors or assigns whether asserted or unasserted as of
the date of this Amendment first indicated above. To the extent that such offsets, defenses or
claims may exist, Borrowers for each of themselves and their successors, assigns, parents,
subsidiaries, affiliates, predecessors, employees, agents, heirs and executors, as applicable
(collectively, “Releasors”), jointly and severally, knowingly, voluntarily and
intentionally release and forever discharge Agents, Lenders, their subsidiaries, affiliates,
officers, directors, employees, agents, consultants, attorneys, predecessors, successors and
assigns, both present and former (individually, a “Releasee” and collectively, the
“Releasees”) of and from any and all manner of actions, causes of action, suits, debts,
controversies, torts, damages, judgments, executions, claims and demands whatsoever, including,
without limitation, any so-called “lender liability” claims or defenses which it has, asserted or
unasserted, in law or in equity, which Releasors ever had or now have against the Releasees,
including, without limitation, any presently existing claim or defense whether or not presently
suspected, contemplated or anticipated based upon, or in any manner connected with (i) any
transaction, event circumstance, action, omission, failure to act or occurrence of any sort or
type, whether known or unknown, which occurred, existed, or was taken or permitted prior to the
execution of this Amendment with respect to the Obligations, the Documents, including the Former
Forbearance Agreement and the Forbearance Agreement, or the administration thereof (ii) any
discussions, commitments, negotiations, conversations or communications, whether oral or evidenced
by a writing of any sort prior to the execution of this Amendment with respect to the Obligations,
or (iii) any thing or matter related to any of the foregoing prior to the execution of this
Amendment. Borrowers acknowledge and agree that the inclusion of this paragraph in this Amendment
and the execution of this Amendment by the Agents and Lenders does not constitute an acknowledgment
or admission by the Agents or Lenders of liability for any matter, or a precedent upon which any
liability may be asserted. If Borrowers assert or commence any claim, counter-claim, demand,
obligation, liability or cause of action in derogation of the foregoing release or challenges the
enforceability of the foregoing release (in each case, a “Violation”), then the Borrowers
jointly and severally agree to pay in addition to such other damages as any Releasee may sustain as
a result of such Violation, all attorneys’ fees and expenses (including in-house and outside
counsels’) incurred by such Releasee as a result of such Violation.
6. This Amendment may be executed in counterparts, each of which will be deemed an original
document, but all of which will constitute a single document. Facsimile and pdf versions of
signatures hereto shall be deemed original signatures, which may be relied upon by all Parties
hereby and shall be binding on the respective xxxxxx.
[Signatures on following page]
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IN WITNESS WHEREOF, the Parties have executed this Amendment on the day and year first written
above.
| BORROWER: | |||||||
| Lexington Precision Corporation | |||||||
| By: | /s/ Xxxxxx Xxxxxx | ||||||
| Name: | Xxxxxx Xxxxxx | ||||||
| Its: | President | ||||||
| Lexington Rubber Group, Inc. | |||||||
| By: | /s/ Xxxxxx Xxxxxx | ||||||
| Name: Its: |
Xxxxxx Xxxxxx President |
||||||
| AGENTS AND FORBEARING LENDERS: | |||||||
| CapitalSource Finance LLC | |||||||
| By: | /s/ Xxxxxx Xxxxxxxxx | ||||||
| Name: | Xxxxxx Xxxxxxxxx | ||||||
| Its: | Authorized Signatory | ||||||
| Xxxxxxx Business Credit Corporation | |||||||
| By: | /s/ Xxxx X. XxXxx | ||||||
| Name: | Xxxx X. XxXxx | ||||||
| Its: | VP | ||||||
| CSE Mortgage LLC | |||||||
| By: | /s/ Xxxxxx Xxxxxxxxx | ||||||
| Name: | Xxxxxx Xxxxxxxxx | ||||||
| Its: | Authorized Signatory | ||||||
| DMD Special Situations Funding LLC | |||||||
| By: CapitalSource Servicing LLC, its servicer | |||||||
| By: | /s/ Xxxxx X. Xxxxxx | ||||||
| Name: | Xxxxx X. Xxxxxx | ||||||
| Its: | Senior Vice President | ||||||
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