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Exhibit 1051
TERM PROMISSORY NOTE
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$450,000 New York, New York
January 16, 1996
FOR VALUE RECEIVED, LEXINGTON PRECISION CORPORATION, a Delaware
corporation (the "Debtor"), hereby unconditionally promises to pay to the order
of CONGRESS FINANCIAL CORPORATION, a California corporation (the "Payee"), at
the offices of Payee at 1133 Avenue of the Americas, New York, New York 10036,
or at such other place as the Payee or any holder hereof may from time to time
designate, the principal sum of FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000)
in lawful money of the United States of America and in immediately available
funds, in eighty-four (84) consecutive monthly installments (or earlier as
hereinafter referred to) on the first day of each month commencing February 1,
1996, of which the first eighty-three (83) installments shall each be in the
amount of FIVE THOUSAND THREE HUNDRED FIFTY-SEVEN AND 14/100 DOLLARS
($5,357.14), and the last (i.e. eighty-fourth (84th)) installment shall be in
the amount of the entire unpaid balance of this Note.
Debtor hereby further promises to pay interest to the order of Payee
on the unpaid principal balance hereof at the Interest Rate. Such interest
shall be paid in like money at said office or place from the date hereof,
commencing February 1, 1996 and on the first day of each month thereafter until
the indebtedness evidenced by this Note is paid in full. Interest payable upon
and during the continuance of an Event of Default or following the effective
date of termination or non-renewal of the Financing Agreements shall be payable
upon demand.
For purposes hereof (a) the term "Interest Rate" shall mean, as to
Prime Rate Loans, a rate of one (1%) percent per annum in excess of the Prime
Rate and as to Eurodollar Rate Loans, a rate of three and one-quarter (3-1/4%)
percent per annum in excess of the Adjusted Eurodollar Rate; PROVIDED, THAT, at
Payee's option, the Interest Rate shall mean a rate of three (3%) percent per
annum in excess of the Prime Rate as to Prime Rate Loans and a rate of five and
one-quarter (5-1/4%) percent per annum in excess of the Adjusted Eurodollar
Rate as to Eurodollar Rate Loans, upon and during the continuance of an Event
of Default or following the effective date of termination or non-renewal of the
Financing Agreements, and (b) the term "Prime Rate" shall mean the rate from
time to time publicly announced by CoreStates Bank, N.A., or its successors, at
its office in Philadelphia, Pennsylvania, as its prime rate, whether or not
such announced rate is the best rate available at such bank. Unless otherwise
defined herein, all capitalized terms used herein shall have the meanings
assigned thereto in the Accounts Agreement (as hereinafter defined) and the
other Financing Agreements.
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The Interest Rate applicable to Prime Rate Loans payable hereunder
shall increase or decrease by an amount equal to each increase or decrease,
respectively, in the Prime Rate, effective on the first day of the month after
any change in the Prime Rate, based on the Prime Rate in effect on the last day
of the month in which any such change occurs. Interest shall be calculated on
the basis of a three hundred sixty (360) day year and actual days elapsed. In
no event shall the interest charged hereunder exceed the maximum permitted
under the laws of the State of New York or other applicable law.
This Note is issued pursuant to the terms and provisions of the letter
agreement re: Amendment to Financing Agreements, dated as of the date hereof,
between Debtor and Payee (the "Amendment") to evidence the "LPC New York Real
Estate Loan A" (as defined in the Amendment) made by Payee to Debtor. This
Note is secured by the "Collateral" described in the Accounts Financing
Agreement [Security Agreement], dated January 11, 1990, by and between Payee
and Debtor, as amended (the "Accounts Agreement") and any agreement, document
or instrument now or at any time hereafter executed and/or delivered in
connection therewith or related thereto (the foregoing, as the same now exist
or may hereafter be amended, modified, supplemented, renewed, extended,
restated or replaced, are hereinafter collectively referred to as the
"Financing Agreements") and is entitled to all of the benefits and rights
thereof and of the Financing Agreements. At the time any payment is due
hereunder, at its option, Payee may charge the amount thereof to any account of
Debtor maintained by Payee.
If any principal or interest payment is not made when due hereunder,
and such failure shall continue for three (3) days, or if any other Event of
Default (as defined in the Accounts Agreement) shall occur for any reason, or
if the Financing Agreements shall be terminated or not renewed for any reason
whatsoever, then and in any such event, in addition to all rights and remedies
of Payee under the Financing Agreements, applicable law or otherwise, all such
rights and remedies being cumulative, not exclusive and enforceable
alternatively, successively and concurrently, Payee may, at its option, declare
any or all of Debtor's obligations, liabilities and indebtedness owing to Payee
under the Financing Agreements (the "Obligations"), including, without
limitation, all amounts owing under this Note, to be due and payable, whereupon
the then unpaid balance hereof together with all interest accrued thereon,
shall forthwith become due and payable, together with interest accruing
thereafter at the then applicable rate stated above until the indebtedness
evidenced by this Note is paid in full, plus the costs and expenses of
collection hereof, including, but not limited to, reasonable attorneys' fees.
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Debtor (i) waives diligence, demand, presentment, protest and notice
of any kind, (ii) agrees that it will not be necessary for any holder hereof to
first institute suit in order to enforce payment of this Note and (iii)
consents to any one or more extensions or postponements of time of payment,
release, surrender or substitution of collateral security, or forbearance or
other indulgence, without notice or consent. Upon the occurrence and during
the continuance of any Event of Default, Payee shall have the right, but not
the obligation to setoff against this Note all money owed by Payee to Debtor.
Payee shall not be required to resort to any Collateral for payment,
but may proceed against Debtor and any guarantors or endorsers hereof in such
order and manner as Payee may choose. None of the rights of Payee shall be
waived or diminished by any failure or delay in the exercise thereof.
Debtor hereby waives the right to a trial by jury and all rights of
setoff and rights to interpose counterclaims and cross-claims in any litigation
or proceeding arising in connection with this Note, the Accounts Agreement, the
other Financing Agreements, the Obligations or the Collateral, other than
compulsory counterclaims, the non-assertion of which would result in a
permanent waiver. Debtor hereby irrevocably consents to the non-exclusive
jurisdiction of the Supreme Court of the State of New York and of the United
States District Court for the Southern District of New York for all purposes in
connection with any action or proceeding arising out of or relating to this
Note, the Accounts Agreement, the other Financing Agreements, the Obligations
or the Collateral and further consents that any process or notice of motion or
other application to said Courts or any judge thereof, or any notice in
connection with any proceeding hereunder may be served (i) inside or outside
the State of New York by registered or certified mail, return receipt
requested, and service or notice so served shall be deemed complete five (5)
days after the same shall have been posted or (ii) in such other manner as may
be permissible under the rules of said Courts. Within thirty (30) days after
such mailing, Debtor shall appear in answer to such process or notice of motion
or other application to said Courts, failing which Debtor shall be deemed in
default and judgment may be entered by Payee against Debtor for the amount of
the claim and other relief requested therein.
The execution and delivery of this Note has been authorized by the
Board of Directors of Debtor.
This Note, the other Obligations and the Collateral shall be governed
by and construed in accordance with the laws of the State of New York and shall
be binding upon the successors and assigns of Debtor and inure to the benefit
of Payee and its successors, endorsees and assigns. If any term or provision
of
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this Note shall be held invalid, illegal or unenforceable, the validity of all
other terms and provisions hereof shall in no way be affected thereby.
This Note may not be changed, modified or terminated orally, but only
by an agreement in writing signed by the Payee or the holder hereof.
Whenever used herein, the terms "Debtor" and "Payee" shall be deemed
to include their respective successors and assigns.
LEXINGTON PRECISION CORPORATION
ATTEST:
By: Warren Delano
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Kenneth I. Greenstein
- ---------------------- Title: President
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[Corporate Seal]
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