LGL GROUP INC — Capital/Financing Update 2005

Oct 4, 2005

8-K 1 form8k03725_09302005.htm sec document UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 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 30, 2005 ------------------ LYNCH CORPORATION -------------------------------------------------------------------------------- (Exact Name of Registrant as specified in Charter) Indiana 1-106 38-1799862 -------------------------------------------------------------------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 140 Greenwich Avenue, 4Th Floor, Greenwich, CT 06830 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (203) 622-1150 -------------- ------------------------------------------------------------------------------ (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)) Item 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT. LOAN AGREEMENT WITH RBC CENTURA BANK. On September 30, 2005, M-tron Industries, Inc.,("M-tron"), and Piezo Technology,Inc.,("PTI"), each wholly-owned subsidiaries of Lynch Corporation(the "Registrant"), entered into a loan agreement(the "Loan Agreement")with RBC Centura Bank("RBC"), which is filed as Exhibit 10.1 to this Current Report on Form 8-K. The Loan Agreement provides for a loan in the amount of $3,040,000 (the "Term Loan"), the proceeds of this loan were used to payoff the $3,000,000 bridge loan with First National Bank of Omaha. The Term Loan bears interest at LIBOR Base Rate plus 2.75% and is to be repaid in monthly installments based on a twenty year amortization, with the then remaining principal balance to be paid on the fifth anniversary of the Term Loan. The Term Loan is secured by a mortgage on PTI's premises. In connection with this Term Loan, PTI entered into a five-year interest rate swap from which it will receive periodic payments at the LIBOR Base Rate and make periodic payments at a fixed rate of 7.51% with monthly settlement and rate reset dates. The Loan Agreement contains a variety of affirmative and negative covenants of types customary in an asset-based lending facility, including those relating to reporting requirements, maintenance of records, properties and corporate existence, compliance with laws, incurrence of other indebtedness and liens, restrictions on certain payments and transactions and extraordinary corporate events. The Loan Agreement also contains financial covenants relating to maintenance of levels of minimal tangible net worth, total liabilities to tangible net worth ratio and fixed charge coverage ratio. In addition, the Loan Agreement provides that the following will constitute events of default thereunder, subject to certain grace periods: (i)payment defaults; (ii) failure to meet reporting requirements; (iii) breach of other obligations under the Loan Agreement; (iv) default with respect to other material indebtedness; (v) final judgment for a material amount not discharged or stayed; and (vi) bankruptcy or insolvency. Pursuant to an Unconditional Guaranty for Payment, filed as Exhibit 10.2 to this Current Report on Form 8-K, the Registrant guaranteed to RBC the payment of its subsidiaries' obligations under the Loan Agreement and ancillary agreements and instruments. Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS. EXHIBITS Number Exhibit ------ ------- 10.1 Loan Agreement, by and among M-tron, PTI and RBC, dated September 30, 2005. 10.2 Unconditional Guaranty for Payment with RBC, dated September 30, 2005 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized. LYNCH CORPORATION By: /s/ Eugene Hynes ----------------------------------- Eugene Hynes Vice President October 04, 2005