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EXHIBIT 1057
PROMISSORY NOTE
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(Demand Loan)
$1,000,000.00 Canton, Ohio
March 14,1996
FOR VALUE RECEIVED, LEXINGTON PRECISION CORPORATION, a
corporation organized under the laws of the State of Delaware (hereinafter
referred to as the "Company"), promises to pay to the order of BANK ONE, AKRON,
NA (hereinafter referred to as the "Bank"), the principal amount of ONE MILLION
AND NO/100 DOLLARS ($1,000,000.00), on demand on or after May 15, 1996, with
interest on the unpaid balance of said principal amount from the date hereof at
eight and thirty-seven one-hundredths percent (8.37%) per annum. If any
installment of principal, interest or other amounts due and payable hereunder
are not paid when due, or within any applicable grace periods, the Company
shall pay interest thereon at the rate per annum of three percent (3.0%) in
excess of the Base Rate, as the same may from time to time be established but
not to exceed the maximum rate allowed by law. Bank shall have the right to
assess a late payment processing fee in the amount of the greater of FIFTY AND
NO/100 DOLLARS ($50.00) or five percent (5.0%) of the scheduled payment in the
event of a default in payment that remains uncured for a period of at least ten
(10) days.
The Company agrees to pay interest on the unpaid principal
amount outstanding of this Note in monthly installments, commencing on April 1,
1996, and continuing on first day of each month thereafter. The unpaid balance
of the principal amount outstanding and all accrued interest thereon shall be
due and payable on demand on or after May 15, 1996.
Payments of both principal of and interest on this Note shall
be made in lawful money of the United States of America, at 50 South Main
Street, Akron, Ohio 44308-1888, or at such other place as the Bank or any
subsequent holder hereof shall have designated to the Company in writing.
Interest payable on this Note shall be computed on a three hundred sixty (360)
day per year basis counting the actual number of days elapsed.
This Note is issued pursuant to and is entitled to the
benefits of a Credit Facility and Security Agreement dated March 14, 1996, by
and between the Company and the Bank (the "Agreement"), to which Agreement
reference is hereby made for a statement of the rights and obligations of the
Bank and the duties and obligations of the Company in relation thereto; but
neither this reference to said Agreement nor any provisions thereof shall
affect or impair the absolute and unconditional obligation of the Company to
pay the principal of or interest on this Note when due.
The Company may prepay all or any portion of this Note at any
time or times and in any amount without penalty or premium.
Upon demand of the Bank on or after May 15, 1996, or if an
Event of Default, as defined in said Agreement, shall occur, the principal of
this Note may be declared immediately due and payable at the option of the
Bank.
In the event that the Company fails to pay any regularly
scheduled principal or interest payment on the Vienna Term Note when due (other
than as a result of acceleration thereof based on a default or event of default
other than the failure to make any such regularly scheduled payments of
principal or interest on the Vienna Term Note when due) which failure is not
cured within the ten (10)-day cure period provided in Section 6A of the
Agreement (a "Payment Default"), or if an Event of Default occurs and is
continuing,
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which arises from fraudulent act(s) or practice(s) of the Company which Event
of Default is not cured within three (3) Business Days after the Company's
receipt of written notice thereof from the Bank (a "Fraud Default"), the
Company hereby authorizes any attorney-at-law to appear in an court of record
in the State of Ohio, or in any other state or territory of the United States,
at any time or times after the above sum becomes due, and waive the issuance
and service of process and confess judgment against it, in favor of any holder
of this Note, for the amount then appearing due, together with the costs of
suit, and thereupon to release all errors and waive all rights of appeal and
stay of execution. The foregoing warrant of attorney shall survive any
judgment, it being understood that should any judgment be vacated for any
reason, the foregoing warrant of attorney nevertheless may thereafter be used
for obtaining an additional judgment or judgments. To the extent that the
provisions of the cognovit warning set forth above the Company's signature
specifically contradict the provisions of this paragraph regarding the
requirement of a Payment Default or a Fraud Default to take a cognovit
judgment, the provisions of this paragraph control.
No delay on the part of any holder hereof in exercising any
power or rights hereunder shall operate as a waiver of any power or rights.
Any demand or notice hereunder to the Company shall be deemed duly given or
made when sent, if given by telecopier, when delivered, if given by personal
delivery or overnight commercial carrier, or the fifth calendar day after
deposit in the United States mail, certified mail, return receipt requested,
addressed to the Company at its address (or telecopier number) set forth in
Rider A of the Agreement or such other address or telecopier number as may be
hereafter designated in writing by the Company to the Bank.
This Note is executed at Canton, Stark County, Ohio.
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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.
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LEXINGTON PRECISION CORPORATION
By Dennis J. Welhouse
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Dennis J. Welhouse
Senior Vice President and Assistant Secretary
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