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Exhibit 10-9
PROMISSORY NOTE MODIFICATION AGREEMENT
This Agreement is made and entered into on July 31, 2001 ("Agreement Date"), to
be effective as of July 1, 2001 ("Effective Date"), by and between Lexington
Precision Corporation and Lexington Rubber Group, Inc. formerly known as
Lexington Components, Inc. (jointly and severally, "Makers"), and Bank One, NA
("Bank One"), successor by merger to Bank One, Akron, NA.
WITNESSETH:
WHEREAS, Makers heretofore executed a promissory note (Vienna Term Loan) in the
amount of $1,425,000.03 dated January 31, 1997, in favor of Bank One, NA, as
same may have been amended or modified from time to time ("Promissory Note");
and, WHEREAS, Makers hereby acknowledge, agree, verify, ratify and affirm that
as of the Agreement Date, the outstanding principal balance on the Promissory
Note is Nine Hundred Seventy Three Thousand Two Hundred AND 21/100 DOLLARS
($973,200.21) plus accrued interest; and, WHEREAS, the Promissory Note has at
all times been, and is now, continuously and without interruption outstanding in
favor of Bank One; and WHEREAS, Makers have requested that the Promissory Note
be modified to the limited extent hereinafter set forth; and, WHEREAS, Bank One
has agreed to such modification; NOW THEREFORE, by mutual agreement of the
parties and in mutual consideration of the agreements contained herein and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree that the Promissory Note is
modified as hereinafter indicated.
1. ACCURACY OF RECITALS.
Makers acknowledge the accuracy of the Recitals, stated above.
2. MODIFICATION OF PROMISSORY NOTE.
2.1 The Promissory Note is hereby amended and restated to read as
follows:
2.1.1 From and after July 1, 2001, interest shall accrue on
the unpaid principal of the Promissory Note at the rate per annum equal
to eight and thirty-seven one-hundredths percent (8.37%) per annum.
Interest shall be calculated on a 360-day year basis and shall be
calculated by dividing the actual number of days which elapsed during
the period interest accrued by a year of 360 days times the interest
rate in effect.
2.1.2 Principal and interest of the Promissory Note shall be
due and payable in consecutive monthly installments each in the sum of
(i) $ 8,333.33 of principal and (ii) all accrued and unpaid interest,
commencing on July 1, 2001, and continuing on the same day of each
successive month thereafter until the maturity date.
2.1.3 The maturity date of the Promissory Note is changed from
July 1, 2001, to February 1, 2002. On the maturity date Makers shall
pay to Bank One the unpaid principal, accrued and unpaid interest, and
all other amounts payable by Makers under the Promissory Note and Loan
Documents, as such term is defined in Paragraph 2.3 hereof.
2.1.4 Makers shall not be entitled to receive, and Bank One
shall not be obligated to make, any further advances under the
Promissory Note.
2.2 Makers jointly and severally hereby authorize any attorney at
law to appear in an action on this Note at any time after the same
becomes due, whether by acceleration or otherwise, in any court of
record in or of the State of Ohio, or elsewhere, and to waive the
issuance of service of process against either or both of said parties,
enter an appearance and to confess judgment in favor of Bank One
against any or all of said parties for the amount that may be due,
together with costs of suit, and to release all errors and waive all
rights of appeal and stay of execution from the judgment rendered.
After the judgment entered against one or more of said parties, the
powers herein conferred may be exercised as to one or more of the
others.
2.3 Each of the Loan Documents is modified to provide that it
shall be a default or an event of default thereunder if Makers shall
fail to comply with any of the covenants of Makers herein or if any
representation or warranty by Makers herein is materially incomplete,
incorrect, or misleading as of the date hereof. As used in this
Agreement, "Loan Documents" shall mean the
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Promissory Note and all documents executed by Makers or others in
connection with the Loan, which is represented by the Promissory Note.
2.4 Each reference in the Loan Documents to any of the Loan
Documents shall be a reference to such document as modified herein.
3. RATIFICATION OF LOAN DOCUMENT AND COLLATERAL.
The Loan Documents are ratified and affirmed by Makers and shall remain in full
force and effect as modified herein. Any property or rights to or interest in
property granted as security in the Loan Documents shall remain as security for
the loan and the obligations of Makers in the Loan Documents.
4. BORROWER REPRESENTATIONS AND WARRANTIES.
Makers, jointly and severally, represent and warrant to Bank One that:
4.1. No event of default under any of the Loan Documents as
modified hereby, nor any event, that, with the giving of notice or the
passage of time or both, would be an event of default under the Loan
Documents as modified herein has occurred and is continuing, except for
matters waived by Agreement dated July 31, 2001.
4.2. There has been no material adverse change in the financial
condition of Makers from the most recent financial statement received
by Bank.
4.3. Each and all representations and warranties of Makers in the
Loan Documents are accurate on the date hereof.
4.4. Makers have no claims, counterclaims, defenses, or set-offs
with respect to the Loan or the Loan Documents as modified herein.
4.5. The Promissory Note and Loan Documents as modified herein are
the legal, valid, and binding obligation of Makers, enforceable against
Makers in accordance with their terms.
4.6. Makers are validly existing under the laws of the State of
Delaware and have the requisite power and authority to execute and
deliver this Agreement and to perform the Loan Documents as modified
herein. The execution and delivery of this Agreement and the
performance of the Loan Documents as modified herein have been duly
authorized by all requisite action by or on behalf of Makers. This
Agreement has been duly executed and delivered on behalf of Makers.
5. BORROWER COVENANTS.
Makers covenant with Bank One that:
5.1. Makers shall execute, deliver, and provide to Bank One such
additional agreements, documents, and instruments as reasonably
required by Bank One to effectuate the intent of this Agreement.
5.2. Makers fully, finally, and forever release and discharge Bank
One and its successors, assigns, directors, officers, employees,
agents, and representatives from any and all actions, causes of action,
claims, debts, demands, liabilities, obligations, and suits, of
whatever kind or nature, in law or equity of Makers, whether now known
or unknown to Makers, (i) in respect of the Loan, the Loan documents,
or the actions or omissions of Bank One in respect of the Loan or the
Loan Documents and (ii) arising from events occurring prior to the date
of this Agreement. As used in this Agreement.
5.3. Contemporaneously with the execution and delivery of this
Agreement, Makers have paid to Bank:
5.3.1. All accrued and unpaid interest under the
Promissory Note and all amounts, other than interest and
principal, due and payable by Makers under the Loan Documents
as the date hereof.
5.3.2. All the internal and external costs and
expenses incurred by Bank One in connection with this
Agreement (including, without limitation, inside and outside
attorneys, appraisal, appraisal review, processing, title,
filing, and recording costs, expenses, and fees).
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6. EXECUTION AND DELIVERY OF AGREEMENT BY BANK.
Bank One shall not be bound by this Agreement until (i) Bank One as executed and
delivered this Agreement, (ii) Makers have performed all of the obligations of
Makers under this Agreement to be performed contemporaneously with the execution
and delivery of this Agreement.
7. INTEGRATION, ENTIRE AGREEMENT, CHANGE, DISCHARGE, TERMINATION, OR WAIVER.
The Loan Documents as modified herein contain the complete understanding and
agreement of Makers and Bank One in respect of the Loan and supersede all prior
representations, warranties, agreements, arrangements, understandings, and
negotiations. No provision of the Loan Documents as modified herein may be
changed, discharged, supplemented, terminated, or waived except in a writing
signed by the parties thereto.
8. BINDING EFFECT.
The Loan Documents as modified herein shall be binding upon and shall inure to
the benefit of Makers and Bank One and their successors and assigns and the
executors, legal administrators, personal representatives, heirs, devisees, and
beneficiaries of Makers, provided, however, Makers may not assign any of their
rights or delegate any of their obligations under the Loan Documents and any
purported assignment or delegation shall be void.
9. CHOICE OF LAW
This Agreement shall be governed by and construed in accordance with the laws of
the State of Ohio without giving effect to conflicts of law principles.
10. COUNTERPART EXECUTION.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the
same document. Signature pages may be detached from the counterparts and
attached to a single copy of this Agreement to physically from one document.
11. NOT A NOVATION.
This Agreement is a modification only and not a novation. Except for the
above-quoted modifications, the Promissory Note, any agreement or security
document, and all the terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This
Agreement is to be considered attached to the Promissory Note and made a part
thereof. The validity, priority and enforceability of the Promissory Note shall
not be impaired hereby.
12. OHIO REAFFIRMATION OF COGNOVIT PROVISION.
Each Maker continues to authorize any attorney at law to appear in an action on
the Promissory Note, as modified, at any time after the same becomes due,
whether by acceleration or otherwise, in any court of record in or of the State
of Ohio, or elsewhere, and to waive the issuance of and service of process
against either or both of the Makers, enter an appearance and to confess
judgment in favor of Bank One against either or both of the Makers for the
amount that may be due under the Promissory Note, as modified, together with
costs of suit, and to release all errors and waive all rights of appeal and stay
of execution from the judgment rendered. After the judgment is entered against
either of the Makers, the powers herein conferred may be exercised as to the
other Makers.
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WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT
TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE.
LEXINGTON PRECISION CORPORATION
By: Warren Delano
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Its: President
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LEXINGTON RUBBER GROUP, INC.
By: Warren Delano
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Its: President
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BANK ONE'S ACCEPTANCE
The foregoing Promissory Note Modification Agreement is hereby agreed to and
acknowledged this 31st day of July 2001.
BANK ONE, NA
By: Joseph E. Manley
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Its: First Vice President
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