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 Webster Business Credit Corporation (“Webster”) as a
lender (CapitalSource and Webster, 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.

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     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 signor.
[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/ Warren Delano
 
           
 
      Name:   Warren Delano
 
      Its:   President
 
                    Lexington Rubber Group, Inc.
 
           
 
      By:   /s/ Warren Delano
 
           
 
      Name:
Its:   Warren Delano
President
 
                AGENTS AND FORBEARING LENDERS:
 
                    CapitalSource Finance LLC
 
           
 
      By:   /s/ Joanne Fungaroli
 
           
 
      Name:   Joanne Fungaroli
 
      Its:   Authorized Signatory
 
                    Webster Business Credit Corporation
 
           
 
      By:   /s/ Alan F. McKay
 
           
 
      Name:   Alan F. McKay
 
      Its:   VP
 
                    CSE Mortgage LLC
 
           
 
      By:   /s/ Joanne Fungaroli
 
           
 
      Name:   Joanne Fungaroli
 
      Its:   Authorized Signatory
 
                    DMD Special Situations Funding LLC         By: CapitalSource
Servicing LLC, its servicer
 
           
 
      By:   /s/ Keith D. Reuben
 
           
 
      Name:   Keith D. Reuben
 
      Its:   Senior Vice President

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