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Exhibit 10.4
PROMISSORY NOTE
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(North Canton Term Loan)
$2,000,000.00 Canton, Ohio
July 1, 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 TWO MILLION
DOLLARS ($2,000,000), on August 1, 2001, or sooner as hereinafter provided, with
interest on the unpaid balance of said principal amount from the date hereof at
a rate per annum equal to eight and thirty-seven one-hundredths percent (8.37%).
If any installment of principal, interest or other amounts due and payable
hereunder are not paid when due, or within any applicable grace periods set
forth in the Agreement, the Company shall pay interest thereon at the rate of
three percent (3.0%) per annum in excess of the Base Rate, as defined in the
Agreement hereinafter referred to, 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%) 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 the principal amount of this Note in
fifty-nine (59) consecutive, equal monthly installments of ELEVEN THOUSAND ONE
HUNDRED ELEVEN DOLLARS ELEVEN CENTS ($11,111.11) each, together with all accrued
interest due at the time of payment of each such installment of principal,
commencing on September 1, 1996, and continuing on the first day of each month
thereafter and a final installment of ONE MILLION THREE HUNDRED FORTY-FOUR
THOUSAND FOUR HUNDRED FORTY-FOUR DOLLARS FIFTY-ONE CENTS ($1,344,444.51),
together with all accrued interest due at the time of payment of such
installment, on August 1, 2001. Monthly payments hereunder shall be applied
first to interest due and the balance to reduction of the principal amount
outstanding.
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. If any payment
under this Note becomes due and payable on a day which is not a Business Day (as
defined in this Agreement), payment thereof shall be made on the immediately
succeeding Business Day.
This Note is issued pursuant to and is entitled to the
benefits of a Credit Facility and Security Agreement dated as of March 14, 1996,
by and among the Company, Lexington Components, Inc. ("LCI"), 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
and LCI 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 and in any amount without penalty or premium, provided that all prepayments
shall be applied to installments of principal in the inverse order of their
maturities.
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If an Event of Default, as defined in said Agreement, shall
occur and shall be continuing, 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, 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 any 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 waives the
issuance and service of process and confesses 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 Cleveland, Cuyahoga 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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