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Exhibit 10.50
PROMISSORY NOTE
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(North Canton Equipment Loan)
$950,000.00 New York, New York
January 31, 1997
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FOR VALUE RECEIVED, LEXINGTON PRECISION CORPORATION, a corporation
organized under the laws of the State of Delaware ("LPC") and LEXINGTON
COMPONENTS, INC., a corporation organized and existing under the laws of the
State of Delaware ("LCI") (hereinafter LPC and LCI are referred to each as
Borrower singularly and referred to jointly and severally as the "Borrowers,"
which term shall mean each of the companies individually and both of them
collectively), jointly and severally promise to pay to the order of BANK ONE,
AKRON, NA (hereinafter referred to as the "Bank"), the principal amount of NINE
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($950,000), or the aggregate unpaid
principal amount of the North Canton Equipment Disbursement Loan and the North
Canton Equipment Term Loan (each as defined in the Agreement, defined below)
made by Lender to Borrowers pursuant to Section 2.F of the Agreement, whichever
is less, with interest on the unpaid principal balance at a rate per annum equal
to the Base Rate (as defined in the Agreement) plus three-quarters percent
(.75%), such interest is payable monthly commencing on the first day of the
second calendar month following the disbursement of the loan or loans and
continuing on the first day of each calendar month thereafter. Interest shall be
computed on a three hundred sixty (360) day basis based upon the actual number
of days elapsed.
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 Borrowers shall pay interest thereon at the
Default Rate (as defined in the Agreement). 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 Borrowers agree to pay the principal amount of this Note in
fifty-nine (59) consecutive, equal monthly installments of principal commencing
on the first day of the second month which follows the expiration of the North
Canton Equipment Loan Commitment Period (as defined in the Agreement) and
continuing on the first day of each calendar month thereafter based on a five
(5) year amortization schedule, with a sixtieth (60th) payment of the remaining
balance on the first day of the sixtieth (60th) month thereafter, as more fully
set forth in the Agreement.
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 Borrowers 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
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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 January 31, 1997, by and among the
Borrowers 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 Borrowers 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 Borrowers to pay the principal of or
interest on this Note when due. This Note evidences the obligations of Borrowers
in respect of the North Canton Equipment Disbursement Loan and the North Canton
Equipment Loan, each as defined in the Agreement.
The Borrowers 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.
If an Event of Default (as defined in the 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 Borrowers fail to pay any regularly scheduled
principal or interest payment on this 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 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 either Borrower which Event of Default is not cured within
three (3) Business Days after the Borrowers' receipt of written notice thereof
from the Bank (a "Fraud Default"), the Borrowers hereby authorize 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 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 Borrowers' 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 Borrower 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
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deposit in the United States mail, certified mail, return receipt requested,
addressed to the 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 Borrowers to the Bank.
This note is executed at New York, New York County, New York.
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
("Borrower")
By: Dennis J. Welhouse
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Name: Dennis J. Welhouse
Title: Senior Vice President and Assistant Secretary
LEXINGTON COMPONENTS, INC.
("Borrower")
By: Dennis J. Welhouse
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Name: Dennis J. Welhouse
Title: Senior Vice President and Assistant Secretary